Because of the inequities associated with previous approaches of providing tax assistance to northern residents, in 1988 a task force was established to study this issue and to make recommendations. The task force held public meetings in many communities across the country and received a number of written submissions. On the basis of these consultations, the task force concluded that an approach based on broad zones of eligibility was preferable. The northern and intermediate zones were defined using ranking systems developed by the task force which were comprised of objective criteria relating to environmental factors, community characteristics, and location.
Full implementation of this system will result in gradually making certain communities ineligible for some or all of the benefits. For example, those communities becoming ineligible for all benefits were entitled to full benefits until the end of 1992, received two-thirds benefits in 1993, will receive one-third benefits in 1994, and zero thereafter.
A review of the events that led to the implementation of the current system establishes that the zonal approach is the right one. The system must be given a chance to reach a mature stage.
When the full impact of the current system is known after the transitional measures have run their course it will be possible to determine whether the current policy is fairer, simpler, and more effective than its predecessors at providing tax assistance to residents of northern and isolated areas.