Photo by Whitehorse Star
Brad Cathers and Kate White
Photo by Whitehorse Star
Brad Cathers and Kate White
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
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