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Peter Turner, Premier Sandy Silver and NDP Leader Liz Hanson

Silver rules out sales tax and job cuts

Premier Sandy Silver made the definitive announcement Wednesday that the territory will not be introducing a harmonized sales tax (HST).

By Taylor Blewett on November 16, 2017

Premier Sandy Silver made the definitive announcement Wednesday that the territory will not be introducing a harmonized sales tax (HST).

Furthermore, the government won’t be cutting jobs, nor will it be raising placer mining royalties.

In doing so, the Liberals essentially rejected three of the dozens of options presented by the financial advisory panel they tasked with looking at ways for the government to get its finances on a more sustainable track.

“We have said from the beginning that we want to hear from Yukoners on the options that were put forward by the panel itself before weighing in as a government,” Silver told the legislative assembly Wednesday in a ministerial statement.

“Yukoners have said no to a sales tax. There will be no sales tax.”

This assurance comes after two months of silence from the government on the possibility of an HST after it was first raised in the panel’s September draft report.

“There’s too many unknowns. It’s something that has never been contemplated before in the Yukon,” Silver told the media after question period when he was asked about his rationale for taking this option off the table.

He cited the significant number of Yukoners who indicated their opposition to a sales tax throughout the panel’s public consultations.

The panel purported in its draft and final report that a sales tax would be the most cost-effective way to raise government revenues if the government chose to pursue this path to balance its books.

However, Silver explained that “there’s more to it” than a “purely economic perspective.”

While the panel was consulting on its draft report this fall, the business community made a compelling case as to the reasons the HST isn’t as feasible an option in a northern jurisdiction like the Yukon, which already deals with unique costs, according to Silver.

Under territorial law, Yukoners would have had to approve a sales tax in a plebescite.

Peter Turner, the president of the Yukon Chamber of Commerce, said the premier’s HST announcement is “good news,” particularly in light of the impending carbon tax to be imposed on Yukoners.

“We do not want to snuff out what appears to be an economy that’s starting to gain ground and starting to accelerate a little bit by hitting businesses and individuals with a whole lot of incremental taxes at the same time,” he said.

However, the report does indicate that many of the Yukoners consulted by the panel aren’t against all taxes.

“Feedback from the public indicated that if taxes were to be raised, alcohol and tobacco taxes and a tax on cannabis are areas where additional revenues could be generated,” the report reads.

Another common theme, according to the report, was the potential to raise revenues through the “taxation of non-resident activities.”

Yukoners pointed to increased user fees for government goods and services – parks and campgrounds, for example – as well as the potential for a hotel tax to be developed.

Turner said the chamber happened to be in the process of forming a hospitality committee that will examine the territory’s tourism, food and beverage and hospitality sectors when the report was released.

The premier acknowledged in the house that the hotel tax suggestion is “highly disputable.”

However, Turner said the hospitality committee will certainly be examining it, and the chamber won’t take a position until it has consulted with the business community.

The opposition parties also talked taxes in their responses to the premier’s HST announcement and ministerial statement in the house.

NDP Leader Liz Hanson criticized the Liberals for their 20 per cent corporate tax cuts in the last budget.

She referenced the panel report’s observation that taxation in the Yukon is already low when compared to other jurisdictions.

Even raising taxes to the levels seen in the Northwest Territories would see the government generate $30 million more in revenue every year, she said.

For context, the government’s average projected annual deficit over the next three years, according to the financial panel, is approximately $50 million.

Hanson also suggested the government consider some of the “innovative solutions” suggested by Yukoners and reiterated in the report.

Examples are a sugar or pop tax, a hotel tax, or a payroll tax for Outside workers who come to the Yukon for employment.

Yukon Party Finance critic Brad Cathers pointed to “a few glaring options that jump out and create immediate questions and concerns among Yukoners.”

He questioned whether the government plans to look at:

• eliminating the fuel tax exemption that Yukon businesses benefit from;

• increasing property taxes for Yukoners living outside of municipal boundaries;

• raising continuing care fees; and

• privatizing elements of health care.

The report discussed all these concepts as options available to the government.

“These are all options that we have not made definitive decisions on, any of them, aside from the ones that I mentioned in the legislative assembly,” Silver stated in the post-legislature scrum.

“The rest of the options, we absolutely need to do our due diligence. We’re just getting this report,” he noted.

While public service layoffs are definitively off the table, Silver would not say for sure whether a hiring freeze would be looked at.

“An important option available to the government is a review of its overall hiring and compensation policies, and potentially near-term restraint (or freeze) in both,” the report reads.

Silver did note that the opening of the Whistle Bend continuing care facility and collective agreements with Yukon teachers and educational assistants (EAs) that tie hiring to student numbers would make a hiring freeze difficult.

“There’s some really good information there from the financial advisory panel about rightsizing, about taking a look at other jurisdictions and making sure that the programs and services we offer are offered in the most expedient and correct size possible,” he said.

“You don’t need to lay off swaths of public servants to do that,” the premier said.

“There’s lots of things we can do to right-size this government. We have an aging population as well; people are retiring.”

What Silver did indicate about the paths his government is looking to follow in response to the panel report he called a “road map” for the future of government financing, is a review of the Health and Social Services department and the services it offers.

“We’re going to start with health, and that’s going to be a process. Hopefully we learn as we move forward. We’re not going to end there.”

He also said the government is focusing on partners with whom it can share responsibility for service delivery across the territory. These include First Nations governments and Yukon municipalities.

Turner also noted that not-for-profit organizations are key partners and resources for the government to keep in mind.

“In some cases, not-for-profit organizations are sort of low-cost providers of services compared to government. There may be efficiencies in having a greater role for not-for-profits and a decreased role for governments,” he explained.

“We’re not paying 26 dollars per hour and full benefits. Not-for-profits in general don’t have the overhead costs that government does up here.”

Now that the financial panel report has been published, the premier said, he’s open to working with the opposition in some capacity, perhaps a select committee, to study the recommendations and begin to make decisions about how to proceed with balancing the territory’s finances.

He also urged the public to sit in on the legislature next Tuesday when members of the panel will appear before MLAs to talk about their findings.

“Once that process is finished, we’ll be weighing in,” he said.

Comments (11)

Up 0 Down 0

Yvon of the Yukon on Nov 22, 2017 at 6:28 pm

I completely agree with the governments decision on this..

The one tax I would really support is the payroll tax for outside workers.. Too many outside workers work in our big money positions as it is already this would for sure weed them out of that position or put pressure on them to move their residence into the territory.

Up 13 Down 0

Altruistic Yukoner on Nov 21, 2017 at 9:18 am

It's interesting to hear the opposition finance critic giving financial advice when it has been clearly shown that he doesn't know the difference between negative and positive. He has access to some kind of new math that nobody else is aware of. We won't get into any of the other financial debaucheries like the cancelled low cost housing projects or the proposed unneeded 8 million dollar soccer field to name a couple. (fiscal conservatism?)
Also in the review of Government departments, Regulatory Affairs sticks out in my mind. What do they regulate because it isn't BBB complaints as we are deemed too small so B.C. handles these for us. It isn't gas price fixing such as we see with all retail outlets charging exactly the same amount. (Collusion personified which violates the Competition Act) I phoned them about this and went to a voicemail where I described my concern and was not even given the courtesy of a call back. What do they regulate please???

Up 29 Down 4

Groucho d'North on Nov 17, 2017 at 1:04 pm

I have a suggestion on how YG can save some money - stop buying lunches for meetings. With the salaries the staff are making, they can afford to buy their own lunch, or if they are just a bit frugal, they can bring a bagged lunch from home. Cut back on the entitlements and perks paid for at the tax-payer expense, I'm sure it will add up to a sizeable amount, And similar to the Federal Liberals and their abuse of participation - when attending climate change meetings afar, send a small delegation or better yet: lobby for making the meeting digital attendance rather than burning more jet fuel to get there and back. Walk the talk already.

Up 27 Down 3

Dave on Nov 17, 2017 at 12:06 pm

@PSG, every point you made hit the nail squarely on the head. Hopefully all the political parties are reading this.

Up 33 Down 3

ProScience Greenie on Nov 17, 2017 at 9:47 am

No HST is very good news and a thumbs up to Sandy and crew for rejecting it at this time. For many of us money doesn't grow on trees so an HST on top of the upcoming carbon tax would really hurt.

Go ahead with a hotel tax for non-residents but making Yukoners pay it would be just plain rude and nothing more than a greedy cash grab.
Sugar/pop tax? That would be nothing more than another sin tax affecting those with lower wages the most and do nothing to reduce consumption. Another cash grab.

Payroll taxes are fine when taxing outside workers but really suck for Yukoners working Outside having to pay that in another province or territory. Should be no such thing as a payroll tax anywhere in this nation.

While we could probably get rid of about 10% of the government workforce that's not going to happen. What is badly needed is to make government work more efficiently, reduce waste and stop the ongoing bloat. We also have too many projects that are either completely unneeded or go so far over budget that heads should roll but never do. A housecleaning is long overdue and badly needed. If this government works on that I'll be impressed. And don't think this is government worker bashing as it is government worker friends, neighbors and family that point out so much of the waste and bloat and are as disgusted as anyone else about it.

And what's up with Hanson pushing for more taxes? Talk about out of touch champagne socialism. It's hard not to like Kate White but the NDP has pretty much lost any connection to regular working folks that already have a hard time making ends meet. Definitely not our parent's and grandparent's NDP.

And I sure wish there was some kind of fiscal conservative training program that we could send our Yukon Party MLA's to attend as they've lost that aspect of the party. Maybe if Brad and the YP crew hadn't of spent our tax dollars like crazy drunken sailors for all those years we'd be in better shape fiscally. Very disappointed with that.

While we have so many great businesses in this Territory there are also some major corporate welfare bums always whining with their hands out for more tax dollars. No respect at all for those types.

Bottom line is that our household and many others are having to tighten belts to make ends meet. Government should do the same for once.

Up 19 Down 12

a person on Nov 16, 2017 at 11:22 pm

Locals, and people from Europe and Asia run tourism businesses in the Yukon that are completely based on our intact ecosystems and pristine air and water. The ones from abroad leave when their season is over, paying nothing specifically for using our wilderness. Same goes for the locals who have tourism businesses, but at least they spend their profits here.

Other companies are acting as middlemen, booking the tours at local businesses and pocketing 20% or more of the price paid by the tourist. They often are from out of the country, connecting their country's travelers to the tourism market in the Yukon. They are providing a good service. Still, they should be paying something to contribute back to this territory as they also are benefiting from our natural wonders.

The northern lights tours are charging a lot of money to take a bus load of people out of the city lights to stare into a starry and hopefully aurora filled sky. (Or to get skunked and sit in the cold looking at the clouds.)

All these people are flying under the radar in terms of paying a little something for a very valuable resource. They should pay a percent of revenues to the territory, even if it's just 1 or 2%.

A little hard to justify when our wildly destructive placer mining industry currently pays a royalty of less than 45 cents on $1700 in gross revenue. What's that? 1/3400 of revenue = .0034 % ?? I can't even do math that small. Let's just say zero. The placer miners have to get some self respect and pay something. It's pathetic. And many if not most placer miners pack up and leave the Yukon as soon as the season is over. They don't spend their money here.

Tour operators think nothing of charging large amounts to people to look at the northern lights, or to canoe down a river, or do a dog sled ride on our trails. They know the value of what we have up here. They should be asked to contribute back a little bit. I think many would be completely okay with this.

The government could be getting a significant and growing income from tourism through direct user taxes / fees for the use of our wilderness.
In return, tourism would be seen as a more and more important partner in the Yukon, contributing significantly to our territory's well being.

As an aside, maybe it's all the best for the placer miners to continue whining about how they shouldn't pay any royalties. Leave them in the dust, hosing this territory for all it's worth while tourism matures into a responsible member of our Yukon family. I hate to pepper this idea with my reflections on the placer miners, but I am disgusted with them.

I'm looking at the picture of how this territory apparently needs more income. We also need to reduce the cost of our government.

Up 32 Down 0

Rick of the Universe on Nov 16, 2017 at 10:13 pm

The Yukon gets a BILLION dollars a year in transfer payments from the Feds
and so much of it is spent foolishly by current and previous governments

All future candidates should have to pass Economics 101 before they are allowed to run methinks

Up 35 Down 2

jc on Nov 16, 2017 at 8:53 pm

So he wants Yukoners to give him ideas on how to get the governments finances on a more sustainable track. So, Yukoners tell him to decrease the government work force, he says no. It was his party who played with the suggestion of a Territorial tax, but rejected it after Yukoners said no, simply because he knows it would cost the Liberals a government in the next election. And he said no to an increase in placer mining royalties simply because he knows that Dawson wouldn't re-elect him in the next election. So, here we are, back to the status quo. Did anyone actually think it would be any different? Politics is such a bore.

Up 7 Down 15

Al Atlintino on Nov 16, 2017 at 4:17 pm

Sandy Silver has made a very strong statement.
Personally, I am not opposed to tax increases. I think many government services are essential.

I think everything was fine until the WB continuing care came along. And we do need another 150 beds as soon as possible which means the ongoing operational costs will soon be about $80 million per year (for 300 beds) and we will of course soon need more than 300 beds.

What is needed is long term planning.

Up 19 Down 3

Yukoners don't want, to go into debt either on Nov 16, 2017 at 3:42 pm

The debt is caused by our letting Ottawa cut out funding, which is reducing the Yukon Government base.
Capital spending in the Yukon, will have to be cut by $50 million a year, because we don't have the funds coming in any more. Program funding well have to be cut.
Cost sharing programs well have to be cut.
It is not easy to do, but it has to be done.
There has to be a greater focus on economic growth, in the Yukon, but governments can't see it, even when it is right in front of their eyes.
Governments can't live and operate on debt.
If they do, we are done.
Wilf Carter

Up 34 Down 4

Just Sayin' on Nov 16, 2017 at 2:55 pm

Hiring Freeze. Seriously.
Most of the YTG employees are not qualified for their current positions.

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