The GN will provide tax breaks and an at-the-pump rebate to Nunavummiut to return most of the carbon tax that the federal government imposed on July 1, which drove up fuel prices by about five cents per litre.
photo courtesy of the GN
The GN anticipates returning close to $10 million to Nunavummiut of the $12 million it will inherit through the carbon tax in 2019-2020, Finance Minister George Hickes told the legislative assembly last week. The remainder will go towards paying the GN’s own higher costs for heating schools, health centres and public housing, Hickes said.
The tax breaks will come via an increase in the basic personal amount to $16,000 per year from $13,325.
“This means that each taxpayer in Nunavut will be able to earn nearly $3,000 more in a year before they begin to pay territorial tax,” said Hickes. “In other words we are using federal carbon revenues so that Nunavummiut can keep more of what they earn. We expect this change will benefit about 15,500 taxpayers and in total will save Nunavummiut about $1.5 million in personal income taxes in 2019.”
In addition, the maximum cost of living tax credit will rise to $1,500 from $1,200. Nunavut taxpayers who earn more than $60,000 will receive up to $300 more back when they file their taxes, according to Hickes.
“We expect this change will benefit about 7,200 tax filers and will reduce income taxes by another $1.8 million,” the minister said.
Finally, the GN will reduce Nunavut’s corporate tax rate for small businesses to three per cent from the current four per cent. This change should reduce the GN’s corporate income tax revenues by about $2.9 million in 2019-2020 and by about $3 million per year starting in 2020-21, Hickes said.
Total tax savings for Nunavummiut over the next four fiscal years is projected to reach nearly $27 million overall, according to the finance minister.
Iqaluit MLAs Adam Arreak Lightstone and Pat Angnakak encouraged Hickes to introduce more incentive-based programs to encourage territorial residents to purchase appliances that are more energy efficient and to renovate their homes to reduce heating costs.
Hickes replied that there is potential for such rebate programs in the future but during this first year of the carbon tax “this is the measure that we felt would make an immediate impact into people’s pocketbooks.”