Issues with northern tax deduction ‘like a broken record’: MLA

Longstanding issues with tax reductions for northerners continue, with requirements unclear and audits too frequent.

Kevin O’Reilly, MLA for Frame Lake, told the Legislative Assembly that the northern resident deductions are cumbersome and don’t help northerners, especially the travel deduction, which is inconsistent year-to-year about how much you can claim to cover travel costs in the territories.

“I seem to raise these deductions on an annual basis, like a broken record,” O’Reilly said. “I know this is not our Minister of Finance’s program, but it is going to take our Finance Minister’s intervention to get this fixed.”

O’Reilly also cited a report from 2018 that found northerners were three times more likely to be audited by the Canada Revenue Agency than Canadians living elsewhere in the country, creating barriers to accessing the deductions.

Frame Lake MLA Kevin O’Reilly. (Supplied by GNWT.)

But Finance Minister Caroline Wawzonek said some of the challenges that may have led to more audits “have been resolved”, in part helped by the change of the finance minister in the federal government. This means that problems with audits should stop for NWT residents.

O’Reilly also noted with travel restrictions in place, people may not be able to take advantage of the travel portion of the northern resident reduction. 

But Wawzonek confirmed trips in the Northwest Territories do qualify for the travel deduction, with a maximum of two trips per year per household member. 

“So please go take your staycation and continue to do so,” said Wawzonek.

Wawzonek said despite the challenges for NWT residents, she didn’t want to be too critical of the tax reduction program.

“It doesn’t allow us to be matching up to inflation, necessarily, but we certainly do get a benefit in terms of our northern residents deduction, so I want to be a bit cautious before biting the hand that feeds us all,” she said.
Wawzonek committed to communicating with the territorial governments in Yukon and Nunavut and said some collaboration could come in the future.

Bailey Moreton
Bailey Moreton
Bailey is new to the north, arriving from Ottawa where he studied journalism at Carleton University. He has worked for newspapers in Halifax, Windsor, and Ottawa. He came to the north hoping to see polar bears. He will settle for a bison. If you have a tip, send it to 905 252-9781, or bmoreton@mytruenorthnow.com.

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