The potential introduction of a territorial sales tax would be up for discussion after the Legislative Assembly resumes on Oct. 15, said Department of Finance spokesperson Todd Sasaki on Thursday.
The idea of a sales tax was raised during the online Budget Dialogues 2020 convened with Finance Minister Caroline Wawzonek in July.
A participant in one of the dialogues asked if the GNWT would bring in a two per cent sales tax to raise about $20 million for the government, an idea that was also noted in one of the Budget Dialogue slides.
“How do we balance the concern with the rise in costs of living that that would entail?” the participant asked.
Wawzonek responded that there would be a trade off with a sales tax.
“What would we get at the end of the day if the cost of living increases? It gets into the conversation of are we going to grow revenues by growing the economy? Do we want to circulate those dollars in the private sector or do we want to drive those dollars into the GNWT? It’s a critical conversation to be had.”
Some members of the business community give the idea of introducing a sales tax a cool reception.
Renée Comeau, executive director of the NWT Chamber of Commerce said it would hurt the business community as private businesses are already struggling to stay open and a sales tax would deter customers.
“The NWT has one of the highest costs of living in Canada, this sales tax will affect every facet of residents’ household budgets as the tax will be applied to fuel, electricity, water, cable, internet (and) food. Each and every MLA currently in the 19th Legislative Assembly campaigned to improve our cost of living and this is the complete opposite of that.”
The Financial Management Board plans to discuss with MLAs the feedback received from the Budget Dialogues, including options for raising revenue for the GNWT, such as a sales tax, Sasaki said.