Liberals, NDP promise to cut costs of northern living

Two weeks before the federal election, the Yukon's Liberal and NDP candidates are promising to make northern living more affordable and to fund development in the territories.

Two weeks before the federal election, the Yukon’s Liberal and NDP candidates are promising to make northern living more affordable and to fund development in the territories.

The announcements mark a shift in a campaign that has seen NDP candidate Melissa Atkinson and Liberal candidate Larry Bagnell touting national plans, but offering little that is specific to the Yukon.

On Monday, Bagnell announced his party would increase the Northern Residents Deduction to a maximum of $22 a day, up from the current maximum of $16.50. The party would also index the benefit to the rate of inflation.

On the same day, Dennis Bevington, NDP MP for the Northwest Territories, released his party’s plan for Canada’s North. The plan includes a commitment of $200 million for northern roads, bridges and ports, and $100 million for renewable energy development in northern and remote communities.

“I look forward to joining (Bevington) in Ottawa,” said Atkinson. “Coming together with hope and optimism and unity is one way to move forward and build a new era of change.”

The NDP plan also pledges to improve the Nutrition North food subsidy program, which was designed to defray the high cost of food in northern fly-in communities. The NDP would extend the program to 50 fly-in communities that are not currently eligible, the majority in northern Ontario. Five communities in the Northwest Territories that are currently ineligible would be covered under the NDP’s expansion of the program. But most fly-in communities in the territories are already covered, including Old Crow, Yukon.

The NDP is also promising to index the Northern Residents Deduction to the rate of inflation, though it has not announced an increase to the deduction.

Many of the NDP’s 26 objectives in its northern plan are, in fact, national in scope. For example, the plan promises $2.7 billion for affordable housing across Canada, and to reduce the small business tax rate from 11 to nine per cent. These commitments will certainly affect the territories, but do not target them specifically.

Still, Atkinson said that of the $1.5 billion per year the NDP promises to spend on infrastructure across Canada, roughly $54 million will come to the Yukon within the first four years of the election.

The Liberal Party’s proposed increase to the Northern Residents Deduction would mark only the second increase since the deduction was created in 1988. It was first increased under the Harper government in 2008.

“It hasn’t kept up with inflation. So it was getting behind and behind and behind,” said Bagnell. “So what we’re doing is increasing it 33 per cent to try and catch up.”

Beth Ellis, a tax preparer with H&R Block in Whitehorse, said the proposed increase is significant.

“They are a little bit behind on raising the amount,” she said. “Nobody really draws attention to it, so it doesn’t get brought up.”

The total amount that Yukoners would save under the proposed increase depends on their living situation and their income. Currently, households with only one person claiming the deduction are entitled to the full amount of $16.50 a day. People living with others who also claim the deduction are entitled to half that amount.

With the proposed increase, people claiming the full amount would get a deduction of $8,030, up from the current maximum of $6,023.

Ellis said the increase would put an extra $600 in the pocket of the average Yukoner making between $43,000 and $87,000 who claims the full amount. At a tax rate of 32 per cent, those people currently save $1,927 a year. With the increased deduction, those savings would rise to $2,570.

The increase could put an extra $850 in the pockets of Yukoners in the highest tax bracket – those making over $136,000 a year.

Of course, the deduction does not help anyone whose income isn’t high enough to be taxed at all.

On Monday, Bagnell also announced plans to increase investment in the Nutrition North program by $40 million over four years.

“In the Yukon, that program only affects Old Crow,” he said. “But it also affects a lot of the other Arctic communities.”

Together, Bagnell said, the changes would lessen the high cost of northern living.

Contact Maura Forrest at