An increase to the Northern Residents Deduction and an extension of the mineral exploration tax credit are among the elements of this week’s federal budget that will have a direct impact on the Yukon.
Effective Jan. 1, 2016, the Northern Residents Deduction has been increased to a maximum of $22 a day, up from $16.50.
That increase will lead to an extra $600 in annual savings for the average Yukoner making between $43,000 and $87,000 who claims the full deduction.
It does not affect those whose income isn’t high enough to be taxed.
The 15 per cent mineral exploration tax credit, first established in 2000, has also been extended for another year.
“I fought hard to get the mineral exploration tax credit … to keep that in place for another year,” said Yukon MP Larry Bagnell. “Mineral prices are so low and there’s very little activity, and I was very relieved to see that was in the budget.”
During the 2015 election campaign, former prime minister Stephen Harper pledged to increase the tax credit to 25 per cent for operations in the territories. Bagnell said he didn’t hear much discussion from the Liberal government about a similar expansion.
The Yukon was specifically mentioned only twice in the 2016-17 budget. The territory will receive $8 million for affordable housing over the next two years, and $890,000 for public transit infrastructure.
But there are various other commitments that will likely affect the Yukon. For instance, the Trudeau government has promised $500 million over five years to improve broadband coverage in rural and remote communities.
Bagnell said the Yukon government has applied to that fund to help with construction of the planned redundant fibre-optic cable up the Dempster Highway, though no decision has been made.
The budget also committed $40 million over two years for the Strategic Investments in Northern Economic Development program, which works to diversify northern economies.
The government has also pledged $10.7 million over two years for Indigenous and Northern Affairs Canada to develop renewable energy projects in indigenous and northern communities that rely on diesel.
The Nutrition North Canada program will also be expanded, with a $64.5-million commitment over five years and an ongoing commitment of $13.8 million per year. In the Yukon, only Old Crow is eligible for the program.
Indigenous and Northern Affairs Canada will receive $19 million over five years to study the Arctic environment, including the potential impacts of oil and gas development in the Beaufort Sea. And the Canadian Northern Economic Development Agency will receive $10.1 million over four years to improve “the timeliness, predictability and transparency of northern regulatory review processes.”
The Northern Adult Basic Education System has also been extended for one year, with a pledge of $3.9 million. That program provided $4.5 million in funds to Yukon College between 2011 and 2015.
On a national level, the Trudeau government has also been heavily promoting its new child benefit, which it estimates will provide families with an average increase of nearly $2,300 in child benefits in 2016-17.
“That’s going to bring 300,000 children out of poverty,” said Bagnell. “One of the reasons I ran is to fight poverty, so to me that’s very exciting.”
The government has also proposed to increase the Guaranteed Income Supplement top-up benefit by up to $947 annually for vulnerable single seniors, and has restored the age of eligibility to 65 from 67.
Employment insurance benefits will also be extended by five weeks, to a maximum of 50 weeks, and by up to 20 weeks for long-tenured workers in certain regions, including Whitehorse.
Still, there are certain commitments Bagnell made during his election campaign last fall that don’t seem to have made it into this budget.
The budget includes a $2.6-billion commitment for on-reserve First Nations education. As the Yukon doesn’t have reserves, it is not eligible for this funding.
In the fall, Bagnell referred to a $500-million fund for aboriginal education infrastructure, which he said the Yukon would have access to. However, the federal budget does include a nearly $1-billion First Nations education infrastructure fund – but only for on-reserve schools.
Last fall, Bagnell also spoke about a $50-million annual pledge to the Post-Secondary Student Support Program, which provides financial assistance to indigenous students in post-secondary education.
That program isn’t mentioned in the budget.
When asked about the changes, Bagnell simply pointed to other commitments for First Nations education that were included in this budget, including a one-year extension of the Aboriginal Languages Initiative.
During his campaign, Bagnell had also promised that a Liberal government would reopen a Canada Revenue Agency office in Whitehorse. There is no specific mention of that promise in the budget, though the Revenue Agency is set to receive $186 million over five years.
“I’ve been talking to the minister’s office a number of times about that, but I haven’t heard any update on that,” Bagnell said.
Yukon NDP Leader Liz Hanson said she found a number of the budget elements “encouraging,” including a promise to open 10 veterans’ service offices across the country and to expand outreach to veterans in the North.
“The devil will be in the details, but there’s a nod in the right direction in a lot of areas,” she said.
She said it’s important that the Yukon-specific commitments for affordable housing and public transit be geared to the territory’s particular needs.
For instance, she said, the Yukon needs to look at some sort of territory-wide transit scheme to help people in the communities access services in Whitehorse.
“I don’t know how that looks, but you certainly hear echoes of it in every little community.”
The Yukon government did not respond to a request for comment by press time.
At the national level, Conservative Leader Rona Ambrose is calling the budget a “nightmare scenario for taxpayers.”
The Liberal government plans to run a deficit of nearly $30 billion in 2016-17, up from the $10-billion deficit promised during the election campaign. And the deficits are expected to continue over the next five years, totalling well over $100 billion.
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