Dion plan would boost northern resident's deduction, cut taxes

Canada's three northern premiers don't understand the benefits that Liberal leader Stéphane Dion's Green Shift tax plan would shower on northern residents, says Kirt Ejesiak, the Liberal party's nominee for Nunavut in the next federal election.

Ejesiak says the Liberal plan would put cash into the pockets of every northern resident who files an income tax return.

That's something the premiers – Dennis Fentie of Yukon, Floyd Roland of the Northwest Territories, and Paul Okalik of Nunavut – did not mention after their recent meeting in Yellowknife broke up June 28.

They emerged from that gathering with an emphatic rejection of the Green Shift plan, saying it would increase the cost of energy in the North.

"Premiers unanimously rejected any proposal for a national carbon tax as a viable solution that will reduce greenhouse gas emissions in the North," a June 28 press release says.

Instead, the premiers said they want more handouts from Ottawa to help territorial governments pay for hydroelectric projects, wind power schemes and other new ways of generating energy.

But Ejesiak says the premiers didn't mention that Dion's proposal would also include a beefed-up northern residents tax deduction, a $150 dollar a year tax credit for all northern tax filers, better family and child tax credits, and across-the-board tax cuts for everyone.

"For individuals, the benefits are increasing – I think that it's important for people to realize that the tax benefits that will come from the Green Shift are from taxes on companies that emit," Ejesiak said.

The Liberal scheme, announced June 19, would impose higher taxes, over four years, on all fuels except gasoline. The estimated $15 billion to be raised by those taxes would then be given back to taxpayers.

The current excise tax on gasoline would not increase, because it's already equal to about $42 per tonne of carbon emitted.

Ejesiak also says the three premiers did not acknowledge a Green Shift commitment to raise the northern residents tax deduction from $6,000 to $7,000 a year, and then have the benefit rise with the cost of living.

A long list of Inuit organizations and northern groups have demanded that measure for years.

Nor did the premiers comment on a long list of tax deductions that Ejesiask says would put money back into the pockets of all Canadians.

"I think it's important that everyone understands what the Liberal Green Shift plan is proposing, because it's a shift in taxes," Ejesiak said.

He also said that northern premiers may be worried that Dion's carbon tax plan could impose extra costs on their own governments and at the same time, don't much care about the benefits it would bring to individual wage earners.

"If you look at the GN as an entity, they may pay more. But for individuals, this is actually of benefit to individuals," Ejesiak said.

For example, a two-parent family in Nunavut with four children, earning $70,000 a year, would receive an annual benefit of $2,136 a year, according to a tax calculator on the Green Shift web site.

A single parent with two children, earning $50,000 a year, would qualify for a benefit of $1107 a year.

"This encourages people to actually work, and there's also money to help people on welfare," Ejesiak said.

Ejesiak admits that companies consuming large amounts of fossil fuels and emitting large amounts of the greenhouse gases that cause global warming "will feel the pinch."

That would include northern-based mining companies, as well as the diesel-dependent Qulliq Energy Corp.

At the same time, the Dion tax plan would impose only modest increases for diesel and other fuels, the Liberal Green Shift document says.

The document points out that the purchase price of diesel has increased 50 per cent over the past 18 months – because of market forces only. The proposed Liberal tax would raise that price by only 4.9 per cent,

Ejesiak says that because Dion's plan is a national program that would apply to every jurisdiction, it's unlikely that mining companies would be driven out of the North.

"They're obviously going to suffer,but I can't see them taking their money and going elsewhere in Canada, because wherever they go they'll face the same thing," Ejesiak said.

Ejesiak did say that he support the idea that Ottawa should help the territories convert to cleaner forms of energy, such as hydro.

To that end, he says that, if elected, he would lobby to help Nunavut come up with the $200 million required for a hydroelectric plant near Iqaluit.

Nunavut is not allowed to borrow that much money, because of a provision in the Nunavut Act that states Nunavut's long-term debt cannot exceed $200 million. Right now, the territorial government's current long-term debt sits at around $130 to $140 million.