Budget contains good news for the North

The first $200-billion federal budget offers enough to Northerners to hold off an election, said Yukon Liberal MP Larry Bagnell.

The first $200-billion federal budget offers enough to Northerners to hold off an election, said Yukon Liberal MP Larry Bagnell.

Covering personal finances, First Nations, the military and mining, the budget covered a lot of northern ground.

The northern residents deduction was increased by 10 per cent, the first increase since its introduction 20 years ago.

The daily allowance is now $16.50, bringing the maximum deduction to $6,022.50 from $5,475.

If passed, the deduction would be retroactive to January 1.

Bagnell praises the increase, but with a backhanded compliment.

“There hasn’t been a change in 20 years — anything would be an improvement,” said Bagnell.

The increase will cost the government about $10 million in each year after this fiscal year.

Compare that to the $120 million annually spent on tax credits for mining exploration in the North.

To keep the sector growing, Ottawa is offering the tax writeoffs for another year.

“Exploration is a risky business,” said Bagnell.

“The incentives are important for the industry.”

Also benefiting the mining industry, which is spending millions of dollars in the territory every year, is $34 million over two years for geological mapping.

The Natural Resources department will spend the money to keep the industry expanding through mineral exploration.

Mapping the Arctic seabed also got a $20-million boost.

The move is an important part of Canada’s increasingly confident claim to the Northwest Passage and Arctic.

The more areas mapped, the stronger the country’s case before the United Nations, which will ultimately determine the boundaries.

Liberal Leader Stephane Dion has said his party plans on supporting the budget.

MPs could excuse themselves from the vote, effectively allowing the budget to pass.

The exact tactics are unknown, said Bagnell.

He wouldn’t say if he’d vote for the budget.

The Liberals have been lobbying for many of the budget announcements targeting the North, said Bagnell.

Dion pledged to increase the northern allowance deduction when he was in Whitehorse in December.

“It proves you can be effective in opposition,” said Bagnell.

“(The Conservatives) have been listening.”

Yukon Conservative candidate Darrell Pasloski could not be reached for comment on the budget.

Premier Dennis Fentie did not return calls.

The frugal budget carries the smallest surplus in recent memory, and Finance Minister Jim Flaherty stressed the country faced lean economic times.

Factors, such as a slowing American economy and struggling manufacturing sector, have pressed the government into a cautious approach to the budget.

After record spending in the last two budgets, Flaherty kept the spending increase in this budget to 3.4 per cent — close to the rate of economic growth.

“We’re getting close to deficit spending,” said Bagnell.

“If some emergency pops up, we could be pushed into a deficit.”

The long-promised Arctic polar class icebreaker will be bought for $720 million.

Unlike current ships, the icebreaker can break through thick ice year-round.

It will replace the old Canadian Coast Guard vessel, the Louis St. Laurent in 2017.

There’s $70 million over two years for aboriginal economic development to deal with labour shortages across the country.

Another $70 million over two years will be spent on aboriginal education in the provinces to set performance standards and enhance graduation rates.

The specific exclusion of territories is odd, said Bagnell.

The budget also excludes territories in its commitment to integrate federal health services for aboriginals into provincial systems.

This allows for more effective and efficient delivery, according to the budget.