Tax scare proves to be “an error”

JOHN THOMPSON

Iqaluit residents won’t be billed thousands of extra dollars in taxes every year, as was feared last week.

The Canada Revenue Agency included Iqaluit on a list of “developed rental markets,” which would have meant anyone living in staff housing would have owed large, unexpected amounts of tax on the value of their rent subsidies. That – if it were true – would have sucked millions out of the pockets of Iqaluit wage-earners who live in staff housing.

“Iqaluit should never have been on that list of communities with developed rental markets,” said Colette Gentes-Hawn, a spokesperson for the CRA. “This is an error. It just should never have been on the list.”

“We’re really sorry to have caused people all kinds of concerns.”

The federal government still doesn’t know how the mix-up happened, she said. “We’re still looking at that.”

But other mistakes recently made by the CRA are being blamed on a flood of last-minute changes issued by the finance minister before the federal government toppled. The agency is spending $3.9 million to mail correct tax information to Canadians, after out-of-date material was sent earlier.

The CRA has no plans to reclassify Iqaluit as a developed rental market, said Colette Gentes-Hawn.

However, one accountant who visited Iqaluit for the CRA during the fall did suggest making such a change, according to MP Nancy Karetak-Lindell, who has been in contact with the agency since the issue became political dynamite.

“Someone remembered someone, and I don’t know who, had asked that question,” she said.

Gentes-Hawn says if Iqaluit’s tax status did change, residents would be given ample warning first.

“Any changes like this would have happened with discussions with the people of Iqaluit,” she said. Notices have been mailed out to employers to clear up confusion.

NDP candidate Bill Riddell surprised a standing-room audience with details of the tax scare during last week’s federal candidates debate in Iqaluit. At the time, he predicted that the people of Iqaluit would lose $4 million in disposable income.

Businessmen later denounced the change as a work of evil, while New Democrats exploited the opportunity to slam incumbent Liberal MP Nancy Karetak-Lindell.

“It’s just another example of the arrogance the government’s had over the last 10 years,” said Iqaluit Centre MLA Hunter Tootoo, who supports the New Democrats, on CBC Radio last week.

Angry Iqalummiut swamped the constituency office of Karetak-Lindell with phone calls and emails.

“It’s amazing, the amount of hate mail we got,” said Susan Scullion, Karetak-Lindell’s executive assistant.

Karetak-Lindell says she took the abuse from opponents in stride. “When you’re the incumbent, you tend to expect all these things,” she said. “You can put spin on any issue. It’s part of politics.”