Watt seeks income tax relief for Nunavik

Senator Charlie Watt made the case for taxation relief in Nunavik last week.

His private member’s bill S-227, an act to amend the income tax act, came up for consideration in the Senate finance committee.

“Taxes in Nunavik are based on the product you purchase once it has reached Nunavik…it hits you right away that residents are paying three to five times more than those living in southern Canada… given the recession I would say that our dollar is worth about 29 cents right now,” Watt told the committee members on Sept. 15.

“The people of Nunavik are cut off from other Canadians geographically, economically and politically, and their living conditions are desperate and deteriorating further because of isolation and distance,” reads Bill S-227.

To remedy this situation, the bill calls for establishing Nunavik as a special zone under the Northern Residents Deduction. This would provide up to $70 a day as an extra deduction for Nunavik residents.

The legislation would also apply a zero per cent GST rate on the supply of goods and services, and exempt petroleum fuels purchased in Nunavik from federal excise taxes.

Not a bad idea at all, agreed Mary Simon, president of Inuit Tapiriit Kanatami, who testified in front of the Senate committee on Sept. 16.

In fact, Simon told the committee that she would like to see similar measures applied to other Inuit regions.

“The problems that Senator Watt has identified for Nunavik are experienced in very similar ways in the other three Inuit regions, and I would encourage the Committee to explore the application of the Bill to all four regions of Inuit Nunangat,” she said.

Simon said the refundable tax credit “could be particular benefit to those with the lowest incomes and most pressing needs, particularly those households with many dependents.”

Simon also said the committee should support giving Inuit hunters and trappers the same kind of tax breaks that southern farmers and loggers receive.

Gerard Duhaime, a researcher from Université Laval in Quebec City, also went before the Senate committee, speaking about the impact of higher prices in Nunavik.

His research has showed that food prices in Nunavik average 57 per cent higher than in southern Quebec. Gas is 47 per cent more expensive. Skidoos cost 15 per cent more, and household products 97 per cent more.

As a result, poverty affects two to three more households in Nunavik than in southern Quebec.

Duhaime’s research was instrumental in encouraging Quebec to give Nunavik $12.7 million in 2007 for a three-year program to lower the high cost of living in the region.

“Putting more money in the pockets of residents of Nunavik makes sense,” said Yves Normandin, president of Arctic Consultants Inc, who also spoke in front of the Senate committee.

“We live in a world of access to many means of communication, as a result a lot of the people of Nunavik know what is available on the market and realize what they cannot afford to buy,” Normandin said.

Watt introduced his member’s bill last February.

After the Senate wraps up its review, the bill will move into its third reading.