How many Yellowknifers have heard something like this?
You're on the phone talking to a stranger down south, say an auditor with the Canada Revenue Agency in Ottawa, when you arrive at the subject of your home address.
“Oh, you're from Yellowknife. I've always wanted to visit the Yukon,” the auditor cheerily responds.
The fact is, many people down south don't know anything about the North. They don't know that a flight from Yellowknife to Toronto for Christmas will likely cost more than a flight from Toronto to Cancun. They don't know that providing heat for your home might cost close to a $1,000 a month during the dead of winter.
Ontarians like to complain about their power bills. Well, they should try paying a power bill around here.
The ignorance of our southern compatriots can be mildly annoying but is generally harmless – unless of course, you are dealing with a federal bureaucrat whose judgment of your situation holds great sway over your life.
A document tabled in the House of Commons on June 20 revealed that Northerners are being audited at a higher rate on their taxes than other Canadians. In 2016, the reassessment rate for NWT residents who claimed Northern deductions was 13.6 per cent. South of the 60th parallel the rate is nine per cent. Northerners do enjoy some perks at tax time: the Northern Residency Deduction, which credits Northerners up to $22 a day for living in the North; and the travel benefit, which allows Northerners to claim back taxes for trips away from home.
To its credit, the Liberal government did increase the Northern Residents Deduction by 33 per cent shortly after coming into power in 2015. Increasing the deduction was a campaign pledge by NWT MP Michael McLeod, and on that front, he delivered.
The problem is the rules are byzantine and increasingly causing Northerners to find themselves running afoul of the Canada Revenue Agency.
The taxpayers ombudsman raised the alarm two years ago but problems persist.
Andy Wong, a Yellowknife accountant (and News/North columnist) blames the problem in part on the complexity of the Northern travel deduction. Northern residents may be eligible for a tax deduction for trips outside the territory, depending on their employment agreement. But the amount which Northerners may claim for travel, however, is based on the lowest return airfare ordinarily available. That is something which is very difficult to ascertain. Especially is you're not flying with a Northern carrier such as Canadian North and First Air.
A spokesperson for Diane Lebouthillier, minister of National Revenue, says the minister has visited all three territories and has heard residents’ concerns regarding reassessments but Northerners deserve more than empty platitudes.
Northerners get these tax benefits because they deserve them. The much higher cost of living and travelling requires it.
Presumably, MP McLeod is doing what he can to educate his counterparts in Ottawa about the real difficulties Northerners face, not only with the higher rate of reassessment but the higher cost of living in general. He obviously has more work to do.
A complicated tax system that punishes Northerners simply for trying to make a living in an areas that don't have an Ontario or Quebec postal code is unacceptable.
Our elected leaders are making many people feel guilty of some wrongdoing, simply because they choose to take advantage of legal tax deductions. Re-assessments are costly, time-consuming and should only occur for good reason.
It's already expensive to live up here. Northerners are keeping the lights on for the nation and shouldn't be treated like criminal suspects by the Canada Revenue Agency.