Nunavut residents’ vacation travel allowance timelines should be extended
“With the two-week isolation requirements … it becomes very difficult for those with small children … to use the VTA”
Letter writer Peter Scholz makes the case for extending the 2020 vacation travel allowance by eight months. (File photo)
I think the Canada Revenue Agency needs to provide an eight-month extension for the 2020 vacation travel allowance, meaning VTAs received have to be spent by Aug. 30, 2021, instead of the usual Dec. 31, 2020.
Nunavut residents are routinely provided a VTA as part of their employment compensation. These amounts are usually tied to the cost of airfares from the employee’s community to the nearest major airport in southern Canada. They are presented in Box 32 of our annual T4: every year, we tell the CRA that we received so much for travel, and then we present the receipts for our travel expenses, so that the CRA does not charge us income tax on the VTA. It’s great: tax-free vacation money! The VTA needs to be spent by Dec. 31 of every year: anything not spent is taxed. For those with large families, the VTA can be a significant portion of their overall family income.
The issue with the current pandemic is that with the two-week isolation requirements before returning to Nunavut, it becomes very difficult for those with small children—almost impossible—to use the VTA. I have three young children, aged five, four and two. There is no way we can spend 14, 24-hour days in a hotel room, without access to the pool and the movies. That’s not to mention the stories I am hearing about substance abuse at the isolation facilities.
Also, for older or infirm people, or those with compromised immune systems, it is extremely unwise to leave the relative safety of Nunavut while the virus still poses a threat.
This is why I think the VTA expenditure timeline needs to be extended, so those who cannot or should not leave Nunavut for the summer 2020 break can have an extra summer in 2021 to spend our 2020 VTAs.
Peter Scholz
Arviat
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Has anyone ever tried to claim the VTA using North Bay, ON as the designated airport for Iqaluit? It’s one of the designated airports on the list and it is closer to Iqaluit than Ottawa. Even though no airlines fly from Iqaluit to North Bay, the tax forms seem to indicate that doesn’t matter. Would using North Bay even make a difference?
Or you could just vacation in Nunavut.
That’s a fair point, but not realistic for many Nunavummiut. Air travel within Nunavut can be more expensive than traveling to the South; as well, the logistics and guiding services for accessing the National and Territorial parks are challenging and very expensive.
But say you have next summer to spend the VTA… well how many trips south in a year do you make? I go south about once a year with the family (And i think that is a lot). and if i cant go this year it does not mean i will be able to go twice next year. so delaying it will only help the really rich (who already go south and spend more then their VTA each year) or those that only plan on staying in Nunavut 1 more year.
One option would be to take a longer vacation next summer. As for how many personal vacation trips I am willing to pay for in a year, that is the concern of myself and my loved ones, thank you.
The easiest answer would be to remove the 2-week quarantine period.
Mainly for Western Canada where infection rates are improving unlike Ontario/Quebec.
“EASY”? in the long run, no, not easy. The virus is wicked and real.
Or …. folks could choose to not spend the $4,000, $6,000, $8,000 and just have a ‘local’ vacation like ‘Fair Weather Libertarian’ suggests.
That way, you don’t give your money to airlines, hotels, restaurants, etc.
You can still claim the portion of the VTA that you spent on a local vacation (maybe in the “wilderness”, or “on-the-land” if you prefer that saying).
That way you pay tax (30% or so, worst case scenario) on the portion you don’t give to the airline, and get to keep 70% – to save, or give to me, or fix up your house, or cabin, or buy a boat, or roller blades for your kid, or give to me.
I thought Box 32 you HAD to go South to or past your nearest major city? That is the problem with it. it only benefits those that want to leave Nunavut. i didn’t know you could use it for being out on the land. Also why cant it be used to go visit family in other parts of Nunavut?
Travel from your community is deductible. You must keep the receipts for ALL vacation expenses, of course, in case of audit, just as you must for airfares. Check with your tax accountant, but the rules are quite clear. Vacation is vacation. It does not have to be to a southern destination. This is not for cheating. It is meant to allow vacation (and medical or other non-reimbursed travel) to be deductible for residents of the north.
The airfare that is allowable as a deduction out-of-the-north is restricted to the ‘designated cities” (Ottawa, Edmonton, etc) so that claims don’t get out of hand. For example, if one travels to Houston, beyond Edmonton, that second leg of the vacation trip is NOT deductible.
Website:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25500-northern-residents-deductions/line-25500-much-you-claim-a-deduction-travel-benefits.html
Excerpts:
“You can only claim a deduction for travel benefits for a trip that you or your household members actually took for vacation, and that started from a prescribed zone.”
“Travel expenses include air, train, and bus fare, vehicle expenses, meals, hotel or motel accommodations, camping fees, and other incidental expenses such as taxis and road/ferry tolls.”
“The lowest return airfare to be used to complete Column 5 of Form T2222 is the cost quoted for a flight from the airport closest to your residence to the nearest designated city to that airport (even if you did not actually travel by air or to that city).”
I am saddened if folks have not taken advantage of this ‘local’ vacation deduction. I know many who have. It might be only be a $500 deduction, but: Better some than none and better late than never.
It’s bad enough that we have been locked in and out.
GN Employees: Has anyone else questioned why our Northern Allowance on our T4 is categorized as VTA?
The federal issue vta is just one problem. The majority of people are employed by the GN. The GN is telling employees that if you leave, you are forced to use two weeks extra to sit in a hotel room, with 30 minutes a day to exercise, for 14 days.
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Where is the union on all of this? Does anyone do anything at NEU?
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No I don’t want to vacation in Nunavut. People have family and social obligations in the south, let alone psychological benefits of getting out of isolation. It isn’t right to force people to stay here by making it financially impossible, or literally impossible for people with young kids.
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This is all illegal and I hope a court somewhere sets the record straight . You can isolate everywhere else in Canada at home, if you are required to isolate at all. They can’t justify this ongoing anymore. Why isn’t the Legislative Assembly sitting and asking these questions?
Elsewhere in Canada can get someone to an ICU and a ventilator quickly and can get test turnaround in a day, maybe a few hours, allowing for fastcontact tracing. Tell me, how many dead people, how many who may suffer lifelong complications (as we’re seeing happening now among COVID-19 survivors in the south) in your community are you willing to trade for your airline ticket?
There is no reason why I can’t isolate at home. There is no reason why the GN hasn’t made Nunavut testing possible yet. There is no evidence that everyone needs to be on a ventilator, the majority of people never have symptoms. The curve was flattened. Time to move on with some precaution. Mememe is literally 1000s of people who are saying this, not just me. There will be consequences for failing to open soon, like the majority of the workforce quitting.
I am a new resident of Nunavut. How do I apply for this VTA?
How does it work?
It’s a benefit paid by your employer, not something everyone automatically gets and not something every employer offers.
Or people can travel to Yellowknife
nice idea.
but not every employer reports Box 32 properly on your T4. it’s a battle many have had and many have lost.
If you do not have a Box 32 reported on your T4, too bad. no matter if you have taken two vacations, whether down south or out on the land you will not be able to claim this on your taxes.
We have people out of work. No wages, no benefits. We have people that cannot travel for a multitude of personally important reasons such as elective surgery. Or to see infirm or sick relatives in the south. At this time, the last thing we need to be worrying about is tax deduction eligibility for those still fortunate enough to receive vacation travel assistance.
It is not a common benefit. Some Hamlets still have it, some do not. Private business mostly does not offer it. GN does not have it. The biggest employee group that still gets a formal VTA are federal employees, who are about as insulated from pandemic employment effects as anyone can be.
You still have a job. You still get a VTA. There are still 5 months left in the year for travel restrictions to be eased. The only thing a VTA eligible employee MIGHT experience as a problem is actually using the money for its intended purpose, then being able to claim the tax deduction in 2021, and finally receiving a nice tax refund as a result. This issue really ought not to be on anyone’s radar given everything else that is going on.
Thanks for your comments Putuguk. I usually enjoy what you have to say. This time I think you’re being a bit glib, though.
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First, your closing comment “This issue really ought not to be on anyone’s radar given everything else that is going on.” Without elaborating too much, we live in a circular economy. When someone spends, someone else earns. If money is spent locally then … hey.
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As for what is on whose radar, that’s a bit subjective. Regarding “… everything else that’s going on”, that’s even more subjective and mainly existential for most; therefore only a conversation I have with scientists friends.
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Most Hamlet and Housing employees get the VTA. Quick math … that’s at least 1,000 employees in the territory, mostly local in every sense of the word. Further, the Northern Living Allowance, which another 5,000 or more employees receive, is treated as VTA for that portion which is spent on vacation, and other qualifying travel.
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Regular life is sequestered because of governments’ reaction to Covid-19. We still live in spite of their efforts. Some are sitting now and reading this, perhaps planning a rebuttal. Many will watch a rerun of the NHL playoffs tonight. People socialize and do bad things today. Some kids will play a game of pick-up basketball on the school grounds. Someone will hug someone else and it will have meaning.
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There are three kinds of ‘us’: Those in the parade; those watching the parade; and those who don’t know that there is a parade
Completely agree with Putuguk. While it is an unfortunate outcome for those of us who receive VTAs, those of us receiving them are some of the luckiest people in this pandemic. This is tax revenue we would be depriving of those in dire need.
You clearly can claim holiday in Nunavut by going out on the land, you get so much a day but at least you can still claim it.
Simply ask questions to the company-/person who filed your tax
So those from the south, who already receive 10 times more on their tax returns because they are from the south than those who are from Nunavut and would rather spend their vacation on the land, want more paid leave.
How about that???
I believe that in its own right is systemic “something.”