Mr. Speaker, I rise on an issue that I raised in question period a number of weeks ago. I have raised this issue many times in the House of Commons. It deals with the fairness in the tax system as it applies to the northern residents tax deduction.
I have made the point over the year that this northern residents tax deduction, which was put in place by the Conservative government in the late eighties to assist northerners with the high cost of living, has remained at the same level throughout 20 years.
The benefit from this program has degraded over that time. We really need to see some fairness put into this program and see that the northern residents tax deduction be brought forward and raised at least by the amount of inflation over the period of the 20 years.
I would note as well that in the federal budget this time the issue of fairness was raised as it concerned the capital gains exemption for small businesses. It, too, had been in place for 20 years and was put in place at a half a million dollars. In the new budget, it was raised to $750,000 under the policy of fairness to the people who would of course get the benefit from that capital gains exemption.
So, we have seen that fairness is a part of the Conservative rhetoric on the budget. I would hope that the Conservatives would consider it when it comes to this very important part of the tax system to northerners.
When I speak of northerners, I am not speaking simply of my riding, the Northwest Territories, but also Yukon, Nunavut and of course many of the northern ridings that stretch across the provinces in the north. There are quite a number of ridings that have residents who are affected by and take advantage of the northern residents tax deduction.
When it was introduced, the policy objectives of the northern residents tax deduction were to create a stable and trained resident workforce in the north. The disincentives to this were, of course, the high cost of living.
I do not have to raise this too much here, but the cost of living in the north, across northern isolated communities across this whole country, is extremely high. In some cases, it is twice that of southern Canada and even higher than that in many cases.
Although there may be high wages for some people in northern situations, those wages have not made that much of a difference because, as the progressive tax system in Canada works, the higher wages, the more taxes paid.
Due to the high cost of living, northerners are also taxed more through the consumption tax known as GST. The cost of goods are more. Northerners are paying more for the basic cost of living, so they are paying more for the taxes that are applied to that cost of living through the GST.
There is also reduced access to goods and services. So, when people do purchase items in the north, when they look for services, they by and large have to pay much more than southern Canadians.
Of course, the additional costs that come from the extreme climate conditions in the north, for example, in Tuktuyaktuk--