Overhaul in order for Yukon’s tax system

Overhaul in order for Yukon's tax system Re: Yukon's $177-million question (Yukonomist, Oct. 31) The taxpayers of Canada would be livid if the story of the "problem" of Yukon's $177-million surplus - $4,800 per person - went national. Yukon, which recei

Re: Yukon’s $177-million question (Yukonomist, Oct. 31)

The taxpayers of Canada would be livid if the story of the “problem” of Yukon’s $177-million surplus – $4,800 per person – went national. Yukon, which receives over $1-billion in transfer payments per year, would join Quebec as the butt of “have-not” jokes, all of us living high on the hog, courtesy of hardworking taxpayers in other provinces.

In reality, Yukon only appears to be an economic basket case due to outdated accounting and taxation methods – methods which should be modernized to provide a clearer picture of Yukon’s level of economic self-reliance.

Yukon businesses and citizens pay hundreds of millions of federal taxes, most of which are returned to us annually as program funding and transfer payments. If, instead, these tax dollars remained here, and were used directly to finance Yukon government programs – without being cycled through Ottawa’s bank accounts – the transfer payment embarrassment would mostly disappear.

The federal/territorial tax system is also in dire need of modernization. Instead of taxing jobs (income taxes) and sales (GST), Yukon should collect the “rental value” of our land and resources. The principle being that taxes should be on the use and abuse of nature, not on the industriousness of our citizens or on the products and services we purchase in order to live and run our businesses. Sales taxes kill jobs by raising the cost of products and services, while getting rid of income taxes would create jobs by making people less expensive for companies to hire.

Furthermore, Yukon industries, like mining, shouldn’t be taxed on their profits but only on the fair market value of the resources and energy they consume, plus on the assessed value of the pollution they are responsible for. This accounting improvement would remove the perverse incentive companies now have to bury their profits in unneeded capital expenditures, marginal exploration and prospecting or overseas tax havens in order to avoid local taxation, plus it would provide an incentive for all Yukoners to use resources and energy more efficiently, and to minimize pollution.

Resource-use levies and pollution fees would be a fair way of compensating Yukoners for the despoliation of our environment and for the depletion of the precious resources which rightfully also belong to future generations and other species.

Frank de Jong