Enriched tax break called ‘a great start’

A federal budget of few surprises has northerners grading it as a satisfactory pass, although with room for improvement.

A federal budget of few surprises has northerners grading it as a satisfactory pass, although with room for improvement.

One initiative laid out in the 400-plus page document is an increase to the northern living allowance.

“To help offset the cost of living, we are increasing the daily amount of the Northern Residents’ Deduction by 10 per cent to $16.50,” Finance Minister Jim Flaherty told the House of Commons during his budget address Tuesday afternoon.

The allowance has not been raised in more than 20 years. The current northern living allowance is $15 daily, and the upgrade will see annual deductions go to $6,022.50 from $5,475— a difference of $547.50.

As long as the budget passes through the House without being struck down - triggering an election - the changes would be retroactive to Jan. 1 of this year.

“It’s a great start,” said Yukon Liberal Party Leader Arthur Mitchell. “I hope it’s just the beginning.”

The Yukon labour force is looking to capitalize on one budget item that allocates $70 million over the next two years to set up job training opportunities for first nation members across the country.

“This new approach will allow us to better match the skills and training of aboriginal Canadians with labour market demands,” read Flaherty.

The federal government also announced it would provide $22 million to help speed up immigration processes over the next two years, geared at helping fill labour shortages.

Rick Karp, president of the Whitehorse Chamber of Commerce, said the move will “absolutely” help Yukon employers fill labour gaps.

At the municipal level of government, Mayor Bev Buckway said she was pleased to see federal gas tax funding be extended permanently, reaching $2 billion per year for Canadian cities in 2009-2010.

“It’s wonderful to see it extended forever, if it is indeed forever, because things can change,” she said Tuesday from her office at city hall

“This gives us a little more certainty, and that’s a good thing.”

The city’s 2008 capital budget has allocated $45 million for gas tax-funded projects over several years, which are chiefly infrastructure and sustainability projects.

Yukon mining leaders are also pleased with the federal budget, which makes two related funding promises.

The government has agreed to extend the mineral exploration tax credit until March 31, 2009, and provide $34 million over the next two years for geological mapping projects in the North.

“I’m very pleased the tax credit has been extended for another year, and anything that encourages exploration in the Yukon in part is a very intelligent move,” Yukon Chamber of Mines president Carl Schulze said in a phone interview from Smithers, B.C.

The $34 million will see the Department of Natural Resources do the mapping work.

“We rely on information generated by government geologists; it’s a lot of very valuable work,” he said.

The Yukon currently has one operating hard-rock mine, Minto, but Schulze said the mining tax credit will hopefully encourage people to invest in Yukon resources. The territory has more than 100 placer operations.

In addition to bolstering exploration of the land, the government has set aside $720 million to protect Arctic sovereignty at sea.

Currently, the Coast Guard’s most capable icebreaker, CCGS Louis S. St-Laurent, is set to be decommissioned in 2017. The $720 million will cover the costs of procuring a replacement icebreaker.

Yukon MP Larry Bagnell said he was pleased with this annoucement. Where this budget falls short, he said in an interview, is leaving the future of the northern economic development fund vague.

“These funds will run out soon; what are they going to do about that?” he asked. The fund sees $90 million doled out between 2004 and 2009 to buttress northern economic activity.

Indian and Northern Affairs Canada (INAC) Minister Chuck Strahl told the Star Tuesday he did not know the future of the funding but did say the program is currently undergoing review, “to make sure the funding is focused properly.”

Mitchell said a budget item he looked for but did not find was funding for the conceptual Yukon Cold Climate Innovation Cluster.

“What happened to that promise?” he asked. “It’s a nice promise, but without the funding, they’re just words.”

The Speech from the Throne, delivered by Gov.-Gen. Michaelle Jean, referred to the government’s promise to fund a “world-class Arctic research station,” although she did not specify where. The budget contains no references to funding an Arctic research centre.

A monumental omission in the 2008 federal budget are the needs of those living in poverty, say critics.

“In a country where people live in affluence, it is unacceptable to have people living in poverty and great distress,” said Mitchell.

Hardy and Bagnell also noted the lack of funding for affordable housing, which is an especially pressing issue facing northernerners living in poverty.

In a brief interview this morning, Premier Dennis Fentie told the Star the territory has done fairly well by this budget.

He cited specifically the inclusion of geological mapping and the mineral tax credit extension as positives, and said the national $400-million allotment for 2,500 new police officers will also benefit the Yukon, where all police work is conducted by the federally-regulated RCMP.