The federal government needs to adjust its tax system to help with the rising rate of inflation hitting northerners' pocket books, union and political officials say.

Jean-Francois Des Lauriers, regional vice-president for the Public Service Alliance of Canada's (PSAC's) northern region, said this morning his union is circulating a petition to lobby the federal government to give more tax relief to northern residents.

'Inflation has increased by 65 per cent and there has been no increase in the Northern Residents Tax Deduction.

'We're looking for an increase of 50 per cent right off the bat,' Des Lauriers said. 'We want it pegged to the rate of inflation.'

The Northern Residents Tax Deduction, for the zone encompassing the three territories, entitles residents to a basic residency amount of $7.50 per day off their income taxes.

Residents are entitled to an additional $7.50 a day if they are the only person living in their household.

Deductions for travel are also available.

Des Lauriers said his union is looking for the increase because the taxation program is no longer doing what it was originally intended to do.

'In the late 1980s, the (Brian) Mulroney government decided to tax the isolated post allowance and the housing allowance that federal government employees were getting,' Des Lauriers said.

'As a form of protest against the federal government, employees of the N.W.T. in Yellowknife put in requests for transfers by the hundreds,' he said.

'In trying to address the situation, the federal government instituted the Northern Residents Tax Deduction equal to the allowance.'

Des Lauriers said the tax deduction, which applied to every northern resident, equated to $5,400 per year for every household but now is worth much less.

'The reason why it was given is everyone is affected by the cost of living,' he said.

Des Lauriers said while there has been some impact on commodity prices in larger centres with the introduction of big box stores, smaller, more isolated communities are suffering with the high price of goods.

'There's been some impact by the big box stores, but people are a little too Whitehorse- and Yellowknife-focused.

'Other northern communities haven't had the impact of that because they are isolated,' he said.

'The federal government didn't make any distinction between smaller communities and other residents living in larger communities.'

He said the PSAC has been circulating a petition across the North in an effort to lobby the federal government into making changes.

'It's been circulating across the three territories. There are several thousand signatures.'

The petition, addressed to Jim Flaherty, the federal Conservative Minister of Finance, and available at http://psacnorth.com/e-mailyourmp, calls on Ottawa to help northerners with the rising cost of living.

'On average, northern households spend $15,000 more per year on living essentials than other Canadians,' the petition states.

'In the 20 years since the Northern Residents' Tax Deduction was first introduced, inflation has risen 65 per cent; however, the deduction has not increased one cent.

'This means the buying power of the maximum deduction available for the residency portion has shrunk from $5,475 in 1987 to $ 2,463.75 today.'

'Despite Conservative Prime Minister Stephen Harper's words of concern about the North, his government has done little to better the lives of northern working families.'

Yukon NDP Leader Todd Hardy said this morning he'd like to see the Yukon government support the move to update the Northern Residents Tax Deduction.

'It affects every single person in the three territories and the northern provinces,' he said.

'Where's the Yukon on this?'

He said he'd like a commitment from Premier Dennis Fentie to send a senior representative from the Department of Finance to a House of Commons Standing Committee on Finance pre-budget consultation for northerners in Iqaluit on Sept. 24.

'I'm asking Dennis Fentie to be proactive on this for all residents of the North,' said Hardy.

'It shows the North is united.'

He said tax incentives could help draw more people to the North and encourage those already here to stay.

Yukon MP Larry Bagnell, Liberal Leader Arthur Mitchell and Fentie could not be reached for comment.

See letter, p. 8.