SUMMARY MANDATE 209 by CraigR

VIEWS: 44 PAGES: 6

									               CANADIAN FEDERATION OF
               INDEPENDENT BUSINESS


               410, 237 – 8th Avenue S.W.
               Calgary, Alberta T2G 5C3
               Telephone: (403) 444-9290
               Fax: (403) 261-7667




July 2, 2003


The Honorable Stephen Kakfwi
P.O. Box 1320
Yellowknife, NT
X1A 2L9

Dear Premier Kafwi:

As you know, the Canadian Federation of Independent Business (CFIB) surveys its members regularly on a
variety of policy issues through its Mandate process. The Northwest Territories’ 200 CFIB members receive
a package complete with questions, backgrounders and argumentation.

Enclosed are the results of our Mandate Ballot 209, as well as the ballots themselves, comments and
contact information from a number of members who requested that we forward them to your attention. We
hope you will take this opportunity to review and respond to the attachments as a means of keeping in touch
with our NWT members.

SUMMARY: MANDATE 209

   The first question of Mandate 209 addresses the Business Incentive Policy (BIP) and whether it should
   be replaced with the elimination of the small business corporate tax. In NWT, 53 per cent of CFIB
   members oppose such a measure, believing the BIP to be an effective tool in aiding local economic
   development. However, 37 percent of local members believe BIP’s elimination would reduce government
   costs.

   The second Mandate question showed very strong support for local governments receiving a portion of
   federal and provincial territorial gasoline tax revenues to help them pay for infrastructure. NWT members
   surpassed the national level of support, with 83 per cent believing investment in core infrastructure would
   act as an enhancement to life and business locally. Only 13 per cent opposed such a measure.

   Question three asked if there should be a publicly funded Pharrmacare system in Canada. NWT is more
   closely aligned with respondents throughout Canada on this issue: 67 per cent opposed inception of
   such funding. Opponents believe such a system would only increase government spending and
   ultimately lead to increases in taxes for business. In fact, only 20 per cent see a publicly funded
   Pharmacare program as a reasonable way to promote universal access to drugs and control health care
   costs.

   The last question in Mandate 209 illustrates that members would like to see balanced budget legislation
   passed, by which the federal government’s ability to go into deficit would be restricted. Redirection of
   program expenditures, rather than deficit, is supported by 63 per cent of NWT members surveyed, while
   23 per cent would consider such a restriction to be inappropriate.
                                                   –2–


I trust that you will find the Mandate information useful and that it will assist your government in the
development of policies sensitive to NWT’s independent businesses. Copies of these survey results are also
being sent, by copy of this letter, to the appropriate Ministers.

If we can be of any assistance to you or your staff, please do not hesitate to call our office at 1-800-235-
9019.

Sincerely,




Corinne Pohlmann
Director, Provincial Affairs, Alberta/NWT
Edmonton


Attch.


cc:      Hon. Joseph Handley, Minister of Finance
         Hon. Michael Miltenberger, Minister of Health and Social Services
         Hon. Vince Steen, Minister of Municipal and Community Affairs
         Hon. Jim Antoine, Minister of Resources, Wildlife and Economic Development
                      Mandate Ballot Results
Issue: Procurement                                        Tabulation Date: February 21, 2003
                                                                                  Issue #209
Question 1:

Should the Business Incentive Policy (BIP) be replaced with the elimination of the small
business corporate tax?

Background: Since 1992, BIP has allowed NWT businesses to bid up to 20 per cent higher on
Government of the Northwest Territories (GNWT) procurement contracts than firms from
elsewhere. In a recent BIP discussion paper, it was suggested that using the taxation system
might be more effective in assisting NWT firms with higher costs of running a Northern
business. Eliminating the small business corporate tax would cost the GNWT about $1.6 million
per year.

Supporters say that eliminating the small business corporate tax would help all NWT sma ll
firms, not just those doing business with government. Eliminating the BOP program would help
reduce costs of government procurement. Business and government would also benefit from
reduced administration and paperwork associated with the tax and BIP policy.

Opponents say that BIP is an effective tool in fostering local economic development and jobs as
it provides business opportunities for local firms. Eliminating the small business corporate tax
would not totally compensate for the higher cost of operating an NWT business and would be
less beneficial for firms who do business with government.



                                            No
                                           53%
                                                                  No interest
                                                                      3%

                                                             Undecided
                                                                7%
                                           Yes
                                           37%


                                                                                  NWT
Should the Business Incentive Policy                  Yes                         37%
(BIP) be replaced with the elimination of the small   No                          53%
business corporate tax?                               Undecided                    7%
                                                      No interest in issue         3%
                      Mandate Ballot Results
Issue: Infrastructure spending                               Tabulation Date: February 21, 2003
                                                                                     Issue #209
Question 2:

Should local governments receive a portion of federal and provincial gasoline tax revenues
to help them pay for infrastructure?

Background: Municipalities are seeking additional funding for infrastructure projects such as
highways, transit systems and water treatment facilities. Revenue sources considered include
new local income taxes and/or sales taxes and reallocating existing gas tax revenues. Federal and
provincial gas taxes generate approximately $13 billion for the government. United States
federal legislation requires that a minimum of 90 per cent of fuel taxes collected from a state are
to be returned to that state for transportation infra-structure renewal ($200 billion over 5 years).

Supporters say that governments should invest in core infrastructure to improve quality of life
and increase Canada’s competitiveness. In 1995, federal gasoline taxes increased by 1.5 cents as
a deficit cutting measure; the deficit is gone yet the tax is still being collected.

Opponents say that dedicating tax revenues for specific initiatives would impede the
government’s flexibility to respond to unforeseen needs of Canadians such as recession, drought,
etc. Infrastructure, like health care, education and the military, is a budgetary priority to be
considered on a year-by- year basis.




                                                      No
                                Yes                  13%
                                83%                               Undecided
                                                                     4%




                                                                          Canada          NWT
Should local governments receive a                Yes                      79%            83%
portion of federal and provincial gasoline        No                       14%            13%
tax revenues to help them pay for                 Undecided                6%              4%
infrastructure?                                   No interest in issue     1%              0%
                     Mandate Ballot Results
Issue: Pharmacare                                           Tabulation Date: February 21, 2003
                                                                                    Issue #209

Question 3:

Should there be a publicly funded national Pharmacare system?

Background: There is currently a debate about whether prescription drugs should be included in
Canada’s publicly funded health care system that could replace existing provincial drug plans. It
is estimated that about 12 per cent of Canadians are without some type of drug plan coverage;
the remainder is divided between those covered by employers’ benefit packages and those
covered by a public plan.

Supporters say that prescription drugs should be part of the publicly funded health care system
since they are medically necessary, and public financing is the only reasonable way to promote
universal access to drugs and control costs. Canadians are already spending this money; private
health expend itures would be transferred to governments and managed publicly, and the overall
result would be a reduction in drug costs.

Opponents say that the funding arrangements would inevitably result in a significant increase in
government spending (upwards of $6 billion annually) and an increase in taxes for business.
They are sceptical about the effectiveness of the public sector to manage costs. Most Canadians
have some kind of drug plan, and government should concentrate on ensuring those not covered
have access to drugs at reasonable cost.




                                          No
                                         67%
                                                    Undecided
                                                      13%
                                             Yes
                                             20%



                                                                          Canada           NWT
Should there be a publicly funded national   Yes                           26%             20%
Pharmacare system?                           No                            62%             67%
                                             Undecided                     11%             13%
                                             No interest in issue           1%              0%
                       Mandate Ballot Results
Issue: Federal Budget                                         Tabulation Date: February 21, 2003
                                                                                      Issue #209

Question 4:

Should the federal government pass balanced budget legislation restricting its ability to go
into deficit?

Background: The federal government has been deficit free since 1997 but it has debated over
going into deficit at various times to pay for spending increases. The 5-year tax cuts plan is
ending in the fiscal year 2003-2004; and consequently the government is looking for a new
direction. It has been suggested that there should be legislation which would require the federal
government to balance its books. Most provinces already have such legislation.

Supporters say that such legislation would prevent the government to go into deficit and force it
to redirect spending among programs. Short stimulus from any potential deficit spending is more
than offset by compound interest costs in the future. It would help increase confidence among
investors and the business community at large.

Opponents say that it would be inappropriate to expect the government to tie its hands and lose
its flexibility to manage the economy. Such legislation would not prevent the government from
overspending, as it could simply raise taxes to balance the books. The government has proven
that it is capable of keeping its books balanced; therefore, legislation is not necessary.




                                                         No
                                                        23%
                                   Yes
                                   63%
                                                          Undecided
                                                            14%




                                                                       Canada          NWT
Should the federal government pass            Yes                       72%            63%
balanced budget legislation restricting its   No                        19%            23%
ability to go into deficit?                   Undecided                 9%             14%
                                              No interest in issue      0%              0%

								
To top