Mr. Speaker, the hon. member has asked that the government reconsider the phasing out of the tax benefits for residents of the north and isolated areas.
I would first like to clarify that the program is not being eliminated at the end of this year. Rather, a new approach to providing benefits to residents of the north was implemented at the beginning of 1991.
This new system was accompanied by a transition period ending this year for those communities whose benefits were being reduced or eliminated. I can appreciate that some individuals living in communities no longer eligible for some or all of the benefits might oppose these changes.
However, after reviewing the events that led to the implementation of the current system, I believe that the zonal approach is the right one. The current system was the result of a comprehensive study. It was implemented on the basis of the recommendations of the task force on tax benefits for northern
and isolated areas established in 1988 and of further consultations as well.
The previous community by community approach to allocating benefits was widely criticized as inherently unfair because it created border problems between adjacent communities that were treated differently for tax purposes.
The existence of ill-defined boundaries made inequities inevitable. The new system is based on carefully delineated broad zones and it minimizes inequities. I believe that the current policy will prove to be fairer, simpler and more effective than any of its predecessors, providing tax assistance to residents of northern and isolated areas.