Ottawa not likely to change tax boundary

  • Jul. 2, 2008 8:00 p.m.

In a letter to the village of Port Clements, federal Finance Minister James Flaherty says Ottawa is not likely to change the boundaries for the northern residents tax deduction to include the Charlottes. Mr. Flaherty said the northern residents tax deduction is intended to help Canada’s northern and isolated communities attract skilled labour and offset the additional costs faced by residents of these areas. The government used eight objective criteria to figure out a “clearly defined geographic boundary” about 15 years ago which established a northern zone and an intermediate zone for the purpose of tax deductions, he wrote. Many of the indicators are based on climate and “nordicity” measures, he wrote, while others are based on community population and distance to an urban centre. “Changing the northern zone boundary to accommodate Port Clements would create large pressure among other communities within the intermediate zone that may be considered more isolated and remote to provide equivalent treatment,” Mr. Flaherty wrote. “It could also raise fairness concerns with respect to individuals living in the far north, where hardship and isolation conditions could be substantially greater than those in Port Clements.” Port wrote to the Finance Minister about the tax deduction in December. The fact that islanders are not eligible for the full northern residents deduction has been an issue here for many years, with several local governments, MPs and MLAs having tried to convince Ottawa to change the boundary.

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