Yukon MP Larry Bagnell is optimistic that changes to the northern travel allowance will be made in the federal budget for 2021, in fulfilment of one of his election campaign promises.

The Northern Residents Deduction provides residents of the three territories with a tax deduction designed to assist with the high cost of living associated with the North. It has been criticized for its complicated reporting requirements.

In an interview with the Star in October, Bagnell listed adjusting the deduction as one of the priorities in his platform.

Now, he told the Star last week, he is “lobbying hard” for those changes to be included in the budget for 2021, which will be presented in the spring.

The initiative falls under the new minister of Northern Affairs, Dan Vandal. It’s the first item noted in his mandate letter, Bagnell said.

The mandate letter stipulates that Vandal’s department will work with Finance Minister Bill Morneau to increase the deduction to at least $1,200 in the North.

It also asks the department to work with the Competition Bureau.

Bagnell speculated that the Competition Bureau will be enlisted to ensure airlines don’t raise fares once deductions are increased.

This will be more relevant to other territories than the Yukon, Bagnell said, as some Arctic communities are only serviced by one airline.

The travel deduction has existed in its current form since 2016. To receive the benefit, the employer of the person travelling must list travel expenses for that year on the employee’s T4. The dollar amount that can be claimed is capped at the lowest return airfare available at the time of travel.

Bagnell hopes changes to the travel deduction will eliminate the airfare caps and requirement of employers.

“The way of calculating it … the lowest economy airfare is very cumbersome, because by the time you request the details and everything, and tax season comes around, you don’t remember what the lowest economy airfare was,” Bagnell said.

He pointed out that Yukoners without an employer who can sign off on the travel expenses aren’t able to receive the deduction.

“Only certain Yukoners can claim it at the moment, and that’s not fair,” he said. “I think everyone should be able to have access to it.”

Bagnell said the Northern Affairs department is still working out the details of the new deduction system.

A proposal will then be put to the Finance department in the creation of next year’s budget. The new budget will be presented in the spring and come into effect in 2021.

“If it goes the way I’m hoping, it’ll be a big improvement,” Bagnell said.

“I’m just really working hard to make sure this continues forward … as quickly as possible because I think these are needed and very helpful changes.”