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Brad Cathers and Kate White

Sales tax not the way to go: YP Finance critic

Opposition Finance critic Brad Cathers doesn’t agree with a new sales tax being suggested by the Liberal-appointed Financial Advisory Panel.

By Chuck Tobin on September 13, 2017

Opposition Finance critic Brad Cathers doesn’t agree with a new sales tax being suggested by the Liberal-appointed Financial Advisory Panel.

Managing growth in costs and government spending while creating a positive climate for investment in the Yukon is what that the government should be focused on, he told the Star Tuesday afternoon.

Cathers also continued to dismiss suggestions that the Yukon Party put government spending on a crash course with heavy debt.

When the Liberals took over the government last December, they couldn’t have asked to be in a better financial position, Cathers suggested.

“With the Liberal carbon tax plus a sales tax, Yukon business owners and citizens are wondering how deep government is going to be reaching into their wallets,” he said.

Premier Sandy Silver announced earlier this year the Yukon Party had left the territory in such a serious, unsustainable financial position that he decided to appoint an independent panel to examine the books and recommend a way forward.

The five-member panel released its draft report Tuesday, just as it was to begin a territory-wide tour.

It was in Haines Junction last night, continues onto Burwash Landing today and will be in Beaver Creek tomorrow.

The intent is to explain its draft report and the options it comes up with while conducting a second round of public input before issuing its final recommendations, expected in early November.

The tour will wrap up in Whitehorse during the first week of October.

The draft report puts forward a number of options in the short-, medium- and long-term to put the territory back on the right path.

Among the short-term measures is the implementation of a sales tax while restraining growth in government spending.

As examples of options available involving the implementation of a sales tax while restraining growth in government spending, the panel noted three different scenarios:

• Capping spending growth at two per cent and introducing a four per cent territorial sales tax to balance the territorial budget by 2020/21;

• Capping spending growth at 1.5 per cent and introducing a four per cent territorial sales tax to balance the territorial budget by 2019/20;

• Capping spending growth at 0.5 per cent and introducing a two per cent territorial sales tax to balance the territorial budget by 2019/20.

Ron Kneebone is a professor of economics at the University of Calgary and one of the five panel members.

During a media briefing Tuesday morning on the draft report, Kneebone said government spending over the last 10 years had exceeded revenue – placing the Yukon on an unsustainable track.

If it isn’t dealt with, the territory’s financial future will only get worse, he warned.

The panel put forward a total of 26 options or suggestions for Yukoners to chew on.

They include the use of partnerships between the public and private sectors to provide some aspects of health care to reduce costs.

It suggests undertaking a review of the mining royalty and tax regime, particularly the royalty rate for the placer gold industry.

Restructuring the territorial tax regime, including a further reduction in corporate taxes and reducing the number of income brackets from five to three, is also suggested.

There is the option of indexing the territory’s cap on borrowing to its gross domestic product, so as the GDP grows, so does the amount of money the territory can borrow.

NDP MLA Kate White said Tuesday she believes the panel is using the sales tax as a distraction to shield some of the other proposals from too much public scrutiny.

She acknowledged the 100-page draft report and even the 33-page executive summary are dense and take a bit of going through.

It’s clear to her, though, that the suggestions of privatizing some health services and reducing corporate taxes seem to be pervasive.

White pointed out corporate taxes have already dropped from 16 to 12 per cent.

Before there’s any further decrease, she argued, there should be some proof the reduction from 16 to 12 per cent did achieve the desired effects.

The NDP MLA did express support for revisiting what she described as antiquated legislation that sets out a royalty on placer gold of $15 an ounce.

While the work and findings of panel are said to be completely independent of government influence, White said, it must be remembered the panel’s mandate was developed by the Liberal government.

The premier was unavailable for an interview about the panel’s recommendations because he is travelling.

He did, however, release a prepared statement.

“The Yukon government is currently facing financial challenges,” says the statement by Silver.

“For the past 10 years, the government’s revenue has grown 1.7 per cent year while spending has grown 2.5 per cent. This is why the decision was made to assemble an independent Yukon Financial Advisory Panel.

“I fully support the work of the independent panel, and I believe the process of engagement the panel is undertaking with Yukoners is incredibly important.”

The premier goes on to encourage all Yukoners to make their views known.

The full report, the executive summary as well as other material related to the panel’s work such as the online survey can be found at yukonplans.ca

Comments (35)

Up 1 Down 0

Junie Jackson on Sep 19, 2017 at 6:39 pm

I am not able to thumbs up or down in this article, ... GO TAX SLAVE! At this point in time, I don't know that any one party is any better than any other, but if people like you keep writing the grass root gut opinions, perhaps a party will come along that will feather our nests with his/her own instead of just throwing the tax payer under the tax bus.

Up 20 Down 5

tax slave on Sep 19, 2017 at 9:31 am

Taxes today are simply extortion feeding a group of incompetent fools calling themselves government - creating poverty by creating a welfare nation of non-producers, stifling innovation, punishing productivity and fostering ever increasing corruption. Communism never works as other peoples' money always runs out.

Up 10 Down 14

WHAT? on Sep 19, 2017 at 8:48 am

Salar you need some help with your statements. The YP didn't put us here - they YP did a great job and gave us some well-needed infrastructure and capital without breaking us. The Liberals made a plan to break us and now want us to pay for it. The Kluane MLA is not a dud. He is my MLA and works hard for us. He worked hard for me personally and is there for his riding. He also did not take a pension and run. He is still here, still working for us - because WE voted him into do just that.

The Libs will get the boot if they bring in a tax, yes. And this tax is anything but FREE money. A tax would come at a cost to all...but if you want to throw your money away, fill your boots.

Calling the YP idiots seems like a weird bandwagon to be on. They did the job, and will fix us up again soon.

Up 14 Down 2

Yukoner81 on Sep 18, 2017 at 9:49 pm

Another positive coming from government making cuts is the inevitable decline in housing values - meaning more people will be able to afford a house without government workers driving the price up! Same goes for rent, less government workers in town = cheaper rentals!

Up 14 Down 6

ralpH on Sep 18, 2017 at 8:58 pm

I remember when Fentie used to get up in the house and brag about record budgets to help Yukoners. His chest stuck out and playing with his tie. Knew then this was unstainable. Then came the Paz trying to out do Fentie. Catchers should know all this lies at the feet of the YP. It will be their legacy for years to come.

Up 10 Down 12

No Tax! on Sep 18, 2017 at 5:45 pm

The Yukon Party can't be responsible for the spending excesses of the Liberals 2 years after they take power. Especially when they don't have a deficit the first year. Looks to me like the Liberals are spending what was in the bank the first year and then they want a sales tax to pay for bigger government the second year and onward. They wanted to be elected to manage the Yukon Government so they need to put on their big girl panties and do their job. This is a jurisdiction of 35,000 people, how hard can this be?

Up 15 Down 28

Salar on Sep 16, 2017 at 7:18 pm

The YP put us here and the former Kuane MLA was a dud and is a dud now.....he got his pension and left and there couldn't have been worse money spent....anyone but Cathers could deliver this criticism and the sad thing is a tax would be good for the Yukon in recycling free money....but the Libs would get the boot if they brought in a Tax and we'd be stuck with the YP again....I'd pay anything not to have those ridiculous idiots in again.

Up 37 Down 4

Yukoner81 on Sep 16, 2017 at 12:10 pm

I agree with most others on here that government cuts instead of a sales tax are the way to go. I will even give the government a bit of advice, the departments of Health and Education eat up more than half the budget so start with some major cuts there!

Up 15 Down 28

Realist on Sep 15, 2017 at 4:32 pm

65 commenters feel that the YP was NOT responsible for the current financial situation, that in less than 1 year, the current Liberal government has dug us into this hole.
Man, I'd like to have their contact info, because I am eligible for a 15 million dollar inheritance, and all I need is someone to give me their bank account information, then I can give them a percentage for helping me......

Up 31 Down 16

Nile on Sep 15, 2017 at 12:17 pm

"When you vote Liberal, you're prepared to throw your values out the window; you're prepared to forget everything you have heard, and hang on for the ride and expect darn near anything they'll throw at you, because the decisions will be made in the backroom with their backroom friends." Gary McRobb - Liberal MLA http://www.hansard.gov.yk.ca/30-legislature/session2/082_Nov_7_2001.html

Up 29 Down 10

Yukon Watchdog on Sep 15, 2017 at 11:26 am

Quit fighting your battles in court. Settle when you know you are in the wrong. Who makes the decision to fight till the bitter end, till the coffers run dry? That and nixing the RR footbridge that might serve a whole 300 people would be a good start. Government needs to pay for this.

Up 24 Down 7

Denise Gregerson on Sep 15, 2017 at 11:06 am

Instead of a sales tax on the little tax payer why not reassess the tax you charge on the gold mined in the Yukon.? Still just 2.5% of value and based on the 1906 value which was $15 an ounce. So today the gold value is about $1300 per ounce but the tax is paid on the $15 an ounce value of 1906. So a tax of about 35 cents per ounce. Of course there would be lots of whining and threats about lost jobs etc. but the government does not have to be vicious about it. Raise the rate to just 70 cents per ounce and they can double the pathetic revenue they get and leave the little tax payer alone.

Up 3 Down 28

Dr Mantis Toboggan on Sep 15, 2017 at 9:57 am

Add a 10% PST and we'll all be happy

Up 12 Down 22

Moose on Sep 14, 2017 at 7:38 pm

@sarah w "Boo Hoo - it's YP's fault. Wrong. People voted the Liberals in here"

LOL Yes it's the Liberals who forced the YP to go on a spending spree the past 10 years and also bloat the size of government to its current size. That's sarcasm btw.

"- that government was doing good things and keeping life affordable for Yukoners."

Really? How were we supposed to pay for equipment and staff at the new Whistlebend facility? I guess the YP would have kept the building empty since that's what they budgeted for! lol

Up 9 Down 2

Placer Mining Ripoff Continues on Sep 14, 2017 at 6:03 pm

Thank you for putting the address to the survey at the bottom, by the way! Nice to see.

Up 23 Down 5

Placer Mining Ripoff Continues on Sep 14, 2017 at 5:43 pm

I can't believe this one flew by.
NEWS FLASH: Placer miners pay 2.5% OF $15 as a royalty, NOT $15!

"The royalty is computed at the rate of 2.5% of the value of the gold, or at such lesser rate as may be fixed by the Commissioner-in-Council. For this purpose, gold is valued at $15 per ounce."
That is 34.5 CENTS per ounce. I actually thought it was 17 cents, but this formula is on the Yukon Government website.

Our Yukon Government in its vast wisdom, values an ounce of gold at 15 dollars. Never know! Prices could drop and you don't want placer miners caught with their pants down, paying too much. Right?

In reality, gold is at about $1,700 right now. Only a hundred times as much as the government is valuing it at to benefit miners.
Fifteen dollars an ounce as a royalty would be highway robbery in the minds of our esteemed placer mining industry. That would only leave them with a measly $1,685 for their trouble.

Up 36 Down 5

Simon on Sep 14, 2017 at 1:52 pm

Government of Yukon needs to get with the times and modernize many of its public-facing services.

Stop dealing in paper, faxes and in-person service. There are far too many employees' roles in government that could easily be replaced by technology. Services like making payments, ordering licenses, paying fines, getting training, renewing certifications...the list goes on and on.

In other words, let the robots do the robot jobs. Let the humans do the complex jobs that robots can't, like nursing, counseling, social work, etc.

There's some huge, huge cost savings to be had here. The government needs to take leadership and make this happen, pronto.

Up 30 Down 25

B on Sep 14, 2017 at 12:03 pm

"During a media briefing Tuesday morning on the draft report, Kneebone said government spending over the last 10 years had exceeded revenue – placing the Yukon on an unsustainable track." Good job YP. Keep feeding the public fairytales about good financial situations you left. You did nothing of the sorts so quit trying to spin this BS.

Up 28 Down 20

Allan Foster on Sep 14, 2017 at 11:58 am

"Managing growth in costs and government spending while creating a positive climate for investment in the Yukon is what that the government should be focused on, Cathers told the Star Tuesday afternoon."

LMAO - was he sleeping when the Pasloski Party funded a golf course that could be used 4 months a year ?

Up 34 Down 8

Lennie on Sep 14, 2017 at 9:57 am

The YP party knew they were done and emptied the bank. The NDP is out of touch. The Liberals are quickly becoming a joke. We are in trouble. How about raising the $15.00 royalty charge on Placer Mining, still at 1899 level. Cut some govt workers, many are obstructive which results in much more work and expense to get the job done. Example: ask Mackwood at Yukon Teachers. If Departments were interested in serving the public, everything would run much smoother with less expense. Try to get a common sense answer out of Medical Services. It goes on and on.

Up 36 Down 12

Yukon nomad on Sep 14, 2017 at 9:51 am

The typical blame it on the other guy line is not good enough or what Yukon people expect of you Mr. Silver! It is up to you to look out for the best interest of Yukoners and that means no extra taxes, and government find a way to make things work without relying on taking it from people"s earnings. If you want to stay on as premier it is something to think about. Maybe you should ask Darryl about listening to constituents AND knowing what common sense tells you what they will not like. It could save us all a lot of money too.

Up 33 Down 21

Rick of the Universe on Sep 13, 2017 at 10:29 pm

"Cathers also continued to dismiss suggestions that the Yukon Party put government spending on a crash course with heavy debt."

Bumptious Brad is lying or failed Economics 101 or BOTH

Up 48 Down 3

Just Say'in on Sep 13, 2017 at 8:33 pm

You want to save 5,000,000.00 in a rush. How about you just drop the crazy idea of building a foot bridge in Pelly. Really guys this is so simple, but then again so are you.

Up 31 Down 12

Erik on Sep 13, 2017 at 8:10 pm

Yukon Party say they did a good job managing finances, liberals say they did not, now the liberals appoint a panel to review them. Who is right? Not sure. One of the reasons that the liberals were elected here is because they are same party as in Ottawa. They should hold their hand out to Trudeau if they want to apply the same standards here. I do know that they have cut budgets in many areas, contract opportunities are way down, highway maintenance efforts are much reduced, and they are in the process of legalizing pot and implementing a carbon tax. Apparently they want Yukoners to do less, pay more, and smoke enough pot to make us so stupid that we don't realize it.

Up 36 Down 4

Just Say'in on Sep 13, 2017 at 8:09 pm

All those promises that you made can't get done. So be it.
Businesses can't borrow money when they are going backwards. No bank in the world would loan money to a business that is losing money.
Go into a bunch of useless departments and shut them down. Get rid of the deadwood (and there is a lot of that). Hiring freeze. Let staffing drop through attrition.

Quit building 4 lane chunks of highway all over the place for no known reason.
I could save you 50,000,000 this year alone.
Oh God! Give us one more election I promise not to Pi#s this one up against the wall.

Up 43 Down 1

Just Say'in on Sep 13, 2017 at 8:02 pm

So here is how business and free enterprise does it. When you run out of money you quit spending. Full Stop.

Up 30 Down 12

June Jackson on Sep 13, 2017 at 6:44 pm

If Trudy has said, put in a sales tax, then Silver will put in a sales tax and the next election the Conservative candidate will say, we'll eliminate the sales tax..and the Liberals will never get in office again.. Trudeau is doing such an incredibly poor job federally that next election the Liberals may well not have a party.
For those blind followers of a party, any party.. there is more to Canada than the Yukon, and one would do well to read the national, international news venues, and forums (except CBC which are political party stumps..depending on which party is in power). His approval rating which sat at 90% is now..According to a poll by "Campaign Research, 39% of Canadians approve of Trudeau, while 46% disapprove. This gives Trudeau a -7 rating, showing the full extent of his lost credibility. Trudeau’s falling numbers are dragging his party down as well. The Liberals and Conservatives are both tied at 34% in the new poll."

I tend not to put much faith in Polls.. easily rigged..but it is indicative of the countries feelings that there are so damn many polls out there now.. In fact, I did a poll myself..I asked my two neighbors who would win if an election were held tomorrow.. both said I don't vote...

Silver has been such a disappointment.. I voted for change.. Paslowski still had to go.. but I expected something better..I didn't expect small business to fall to the tax knife, or seniors.. Trudeau has committed to eliminating the GIS by 2019 and saving 3 billion dollars over the senior bodies..

Anyone who thinks that the 1.4 trillion dollar debt we are looking at is the fault of previous governments, think again and do your research..this is what Trudeau AND the provinces have racked up in two short years. Trudy's 'modest' deficit has gained a lot of weight.
http://www.torontosun.com/2017/09/07/lost-resource-opportunities-mean-higher-taxes there are so many URLs about this I couldn't being to post them all... But here is an interesting one..career politicians can see where the wind is blowing.. just saying'... http://www.torontosun.com/2017/08/05/liberals-exiting-off-sinking-ship

Up 40 Down 9

Sad on Sep 13, 2017 at 6:26 pm

Liberals had no problem spending half a million dollars on renovating their own workspaces but now say we all have to pay up with a new tax??

Up 37 Down 1

ralpH on Sep 13, 2017 at 6:04 pm

How about - 10 percent in spending and decrease in employee numbers through attrition and jobs that are no longer needed. Silver is between a rock and a hard place. Upset the public sector or upset the population? Tighter purse strings and attrition are his only option.

Up 48 Down 2

Barb on Sep 13, 2017 at 4:59 pm

Okay so let me get this right... We the taxpayers have to deal with an already tight budget and you want to add a 4% sales tax on top of rising gas prices, a carbon tax, high rental rates, high utility rates, a 9% increase in electrical rates and no increase in wages? Where do you suppose we are to pull this money from to follow your plan of balancing the budget?

Up 30 Down 25

Sarah W on Sep 13, 2017 at 4:35 pm

Boo Hoo - it's YP's fault. Wrong. People voted the Liberals in here, they voted them in federally, and now they have to face the storm that will leave us devastated once again until next election. Only then, YP will REALLY have a mess to clean up. Nevermind the boo hoo blame game of the Liberal crybabies. You can't use that excuse for every sh***y thing your government does. Not every sh***y idea and regulation and policy and stupid tax coming forward is YP's fault - that government was doing good things and keeping life affordable for Yukoners.

Up 25 Down 5

ProScience Greenie on Sep 13, 2017 at 4:35 pm

If the Libs want a chance at re-election they'll throw this talk of a sales tax into the dumpster and focus on using our tax dollars more wisely and efficiently with less going out as gravy to the various individuals, groups and businesses addicted to government handouts. And deal with that bloated upper level staff already please.

There is no way to spin away the fact that the Yukon Party spent like drunken sailors and bloated government. They shouldn't be pointing fingers like they are until they straighten up their act and start acting more fiscally conservative. Yukon Party supporters, it's you that need to hammer this message home to your party if you want them to win again.

Fair enough for the NDP to go on about mining and resource royalties but it would also be fair to look at something similar for the tourism industry which depends on a lot of our tax dollars to stay afloat, sees a lot of profits go Outside, pays low wages and brings in a lot of C02 spewing traffic that beats the crap out of our highways as bad or worse than mining related traffic. Time for that industry to put a bit back into the kitty rather than always getting a free pass. And it wouldn't hurt the NDP to get a bit of a fiscal conservative streak either.

Up 22 Down 16

B - if you believe that then there was no point voting Liberal on Sep 13, 2017 at 4:34 pm

There was lots of money when YP left and taxes went down under them...
If you don't think the Libs can do anything then maybe they shouldn't have been elected in the first place. Or maybe you don't think elections matter.

Show leadership and actually take responsibility for once.

Up 58 Down 8

Math on Sep 13, 2017 at 3:42 pm

Government had the option to read this report, approve its release and simultaneously clearly state there will be no sales tax. The last they did not do.
Come on, did a single Yukoner not on the panel actually suggest a sales tax?

Up 50 Down 72

B on Sep 13, 2017 at 3:09 pm

The YP is responsible for this financial crisis not the liberals.

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