Feds cool on GST relief for Inuit

Northerners pay as much in tax alone for sheet of plywood as southerners pay to buy it



The federal government will keep charging Inuit for GST, despite a plea for tax relief from their national lobby group in Ottawa.

Jose Kusugak, president of the Inuit Tapiriit Kanatami, called on the federal government last week to abolish the goods and services tax for Inuit.

Kusugak said Prime Minister Paul Martin should decree the tax relief in order to bring down the cost of living in the North.

Kusugak’s main beef with the much-maligned GST is how the high cost of shipping products to the North raises prices – and taxes – in the stores.

Costly cargo services become even more expensive because the seven per cent tax applies to shipping, as well as purchases made at the cash register.

Once residents bring an item to the cash register, Kusugak said the price is so inflated that Inuit end up spending two to five times more on GST than they would if they were down South.

For example, Kusugak calculated that a four-by-eight piece of plywood, a half-inch thick, costs around $27 in the South, plus $3 for the GST. Up north, the same sheet would cost around $140, plus a GST charge of $27.

He said the government is only applying such taxation in the North because they didn’t take northern realities into consideration when they designed the tax.

“The GST has affected the Arctic badly,” Kusugak said. “It didn’t mean to affect the Arctic badly, but it did.”

The government’s option to lift the GST for Inuit would be recognizing how northern residents are struggling to keep up with their daily expenses, Kusugak said.

“Inuit are taxpayers like any other Canadians,” he said. “We are more than taxpayers because we pay more than our share of the GST.

“And Inuit are not the great money-makers of the Arctic.”

He said there was no particular reason why he put the request to the prime minister right now.

But Kusugak said after lobbying several cabinet ministers for the change during pre-budget deliberations, he was disappointed to see that there were no Inuit-specific tax measures in the final draft of the federal budget.

Kusugak said before the budget was released he tried to convince Ralph Goodale, the finance minister, and Andy Scott, the Indian Affairs minister, to adopt his idea.

Kusugak pointed out that Inuit and other residents in Labrador and Nunavik also pay provincial sales tax, on top of the GST. He said he’ll be pushing provincial governments to eliminate their taxes in their Arctic regions, as well.

He argued that tax relief would help Inuit jurisdictions, like Nunavut, become more self-reliant, instead of depending heavily on government transfers. Nunavut Finance Minister Leona Aglukkaq echoed his sentiments, telling media that the territorial government was spending a lot on the GST, as well.

However, a spokesman for the federal finance minister said the government has no plans for altering the GST.

“We’ll consider anything,” said Pat Breton. “But our policy on the GST is it’s most effective when it’s applied to all uniformly.”

Breton said the government already provides tax relief through the Northern residents’ deduction on income tax, for anyone living in the North for about a year.

Otherwise, he said the government tends to ease the cost of living for Northerners through programming, like the $90-million northern economic development fund.

According to the Canadian Taxpayers Federation, the federal government collected $27.1 billion in GST revenue in 2001. The Liberals said they would axe the tax when they took power in 1993, but didn’t.

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