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Federal budget includes changes to Northern Residents Deduction, minimum wage, green energy funds

The massive budget included some rare references to the territory.
Crystal Schick/Yukon News Yukon MP Larry Bagnell speaks at an announcement in Whitehorse on July 8, 2019.

The federal government’s 2021 budget is big on spending for national priorities like childcare and improvements to long-term care homes, along with Northern-specific spending to address climate change and food security.

Finance Minister Chrystia Freeland tabled the document on April 19 in Ottawa.

The budget includes more than $100 million in new spending over the next three years targeting a wide variety of voters, from seniors and their caregivers to parents and business owners. In her speech, Freeland highlighted $3 billion for improving long-term care facilities, $10-per-day childcare and extended COVID-19 supports.

“This budget is about finishing the fight against COVID,” Freeland said, in her budget-day speech. “It’s about healing the economic wounds left by the COVID recession. And it’s about creating more jobs and prosperity for Canadians in the days and decades to come.”

There are also a number of specific references for the North.

“There’s very seldom references to a specific location, so that is very exciting. And it’s 740 pages, so it’s huge,” said Yukon MP Larry Bagnell.

Bagnell said Northerners can be excited in particular for tourism industry support, funding for climate change and hydroelectricity projects and increased funding for northern research.

Changes to the Northern Residents Deduction would allow residents without employer-provided travel benefits to claim up to $1,200 for eligible travel expenses in 2021. The change is expected to cost the federal government $125 million over five years.

The ministers in charge of Northern Affairs and the Competition Bureau will “ensure that these savings are for the benefit of citizens in the North rather than transportation providers.”

“I was really excited about a number of things that I lobbied hard for and one that will really make a number of Yukoners happy is the northern residents deduction expansion,” said Bagnell.

“Right now, you only get it if your employer gives you a travel allowance and puts it on your T4 slip. I’ve lobbied long and hard that that’s not fair,” he said.

In other specific funding earmarked for the territories, the budget includes an increase of $54 million over 2021-2022 to “renew” the Territorial Health Investment Fund. The breakdown would see $12.8 million to the Yukon, $27 million to Nunavut and $14.2 million to the Northwest Territories.

There is also a destination for “Addressing Climate Change in Yukon.”

That commitment provides $25 million for supporting the Yukon Government with its climate change priorities.

Separate parts of the document earmark $40.4 million for green electricity projects, including the Atlin Hydro Expansion Project, and more funds for Indigenous clean energy projects.

The budget also includes $1 billion over six years, starting in 2021-22, for the Universal Broadband Fund to support a more rapid rollout of projects that would provide high-speed internet to rural communities.

The territorial government may also have a chance to access a $2.5 billion fund and reallocated $1.3 billion in existing funding that has been set aside in order to help build, repair or support 35,000 housing units across the country.

The need to protect wild Pacific salmon, including populations in the Yukon and British Columbia, is specifically referenced in the budget with $647.1 million over five years to “stabilize and conserve wild Pacific salmon populations, including through investment in research, new hatchery facilities, and habitat restoration.”

The budget acknowledges that the tourism sector has been one of the hardest-hit industries during the pandemic.

The budget includes new funding to support major festivals, create new Destination Canada marketing campaigns and a $500 million Tourism Relief Fund to be administered by regional development agencies.

“I lobbied very hard for tourism because it’s the hardest hit. It’s the only one that the border is closed to. People are hanging on by their fingernails, some of them,” he said. “We are extending the wage subsidy and the rent subsidy, which is really critical to a number of Yukon businesses.”

There’s also increased funding for Nutrition North.

The budget also includes specific funding pools to improve life for Indigenous people, including $6 billion for infrastructure in Indigenous communities that Bagnell noted could contribute to planned projects such as long-term care facilities in communities.

There is also $2.2 billion to help end the tragedy of missing and murdered Indigenous women and girls.

– With files from The Canadian Press

Contact Haley Ritchie at