America’s winter playground offers bounty for new telecommuting residents

We can probably outbid Vermont for new workers

What’s a small, remote, triangular-shaped jurisdiction supposed to do when it needs to attract people to build its communities and tax base?

How about offering US$10,000 if you move there?

Vermont is offering this bounty to people who work remotely for employers located elsewhere. If you work from home or a co-working space (like (co)space in Whitehorse, for example) and become an official Vermont resident, then you can tap into government cash for a new computer, broadband access, moving expenses or your co-working fees.

Described by some as “America’s Winter Playground,” lots of people seem happy to visit the state but not enough choose to live there. It is America’s 49th most populous state, behind even Alaska, and its population shrank 0.3 percent between 2010 and mid-2017. The remaining Vermonters are aging fast, with only two states having a higher median age.

The Wall Street Journal immediately savaged the plan. Under the headline “As residents flee, the state has an offer you will probably refuse,” adding that the state is “overtaxed.” It has the fifth highest state income tax for the higher tax brackets, and its property taxes were the third highest in the union.

Not even the Journal was cruel enough to point out that the state has only budgeted enough money to lure 50 people to Vermont over the next three years.

Nonetheless, state officials profess high hopes. “Vermont isn’t just a place to ski and try craft beers; it’s an ideal state for raising a family and growing a business,” Department of Tourism and Marketing Commissioner Wendy Knight told the Associated Press.

The state is also offering a sister program called Stay to Stay, which aims to convert tourists into full-time residents. Picture the Yukon government offering a long-weekend package to tourists where Friday night involved a soiree with Whitehorse city council and the chamber of commerce, free time on the weekend to visit local attractions, and you spent Monday visiting potential employers, realtors and (co)space.

The Yukon has tried this kind of thing before for specific professions. There are financial incentives, for example, for some healthcare professionals to move to the Yukon. And it seems like I read in the paper at least once a year that someone has been paid handsomely to move here to be a deputy minister.

I have also heard local fiscal policy wonks joke that we have an unintended incentive program in place to attract senior citizens through our extremely low continuing care rates, which by some estimates are a tenth or less of the cost of providing the service. One does hear stories of Yukoners bringing aging relatives to the territory for their golden years as continuing care costs spiral in the southern provinces.

But we haven’t taken the idea to broader swathes of the economy.

We might want to think about it. We have quite a few advantages over Vermont, including some financial fundamentals.

First, there’s taxes. We don’t have a territorial sales tax and our income taxes are reasonable compared to most provinces. Whitehorse City Council has been steadily raising property taxes for a decade, but they have so far only nibbled away at the Yukon’s tax advantage.

We also have the transfer payment formula, under which Ottawa will dole out $25,836 per Yukoner this year. This figure is based on our population, among other factors too tedious to mention. We could probably offer far more than Vermont’s US$10,000 and still recoup our investment within a year of the newcomers showing up in the population figures.

The numbers work even better if the teleworkers bring family members with them, especially working-age ones who will pay taxes.

Think about the possibilities. We could make our headline figure bigger than Vermont’s, but include some fine print that it will only be paid out over three years to stop people from coming for just a tax season or two. You could even make it more effective by paying a finder’s fee to Yukoners. This would give them an incentive to talk friends and family into moving here, similar to employee referral schemes offered by some talent-hungry companies.

Fiscal killjoys at the Department of Finance in Ottawa may have told their Yukon counterparts not to try to game the system like this, but if others are doing it then maybe we should say we need to protect ourselves. In addition to Vermont, a half-dozen rural communities in Canada from Cape Breton to Saskatchewan have offered free or highly discounted land for people who relocate. And our Alaskan friends are already running an elaborate bounty system via the annual Alaska Dividend. Even with Alaska suffering a fiscal meltdown, the state paid each resident US$1,600 this year instead of charging a state income tax.

It is still too early to tell how effective Vermont’s scheme will be. But for a modest investment, they have already garnered plenty of international media coverage. I’m sure Yukoners could put together an even snappier marketing program.

The TV ad might show the Commissioner dropping off gold coins on Dec. 31 for grateful new Yukoners, freshly liberated from some commuterville in southern Canada. The camera wouldn’t show the thermometer, or the finance officials tallying up the boost to our transfer payment.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.

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