Increase to Northern Residents Deduction boosts some Yukoners' tax returns

Increase to Northern Residents Deduction boosts some Yukoners' tax returns

It's just the start of tax season, but things are busy at Liberty Tax Service in Whitehorse. 

Owner Judi Hauser is greeting a lot of clients.

"This is our very busy time of the year, we have probably about 40 to 50 people coming through the doors through the day," she says.

Many of those clients have been surprised at this year's tax returns. 

"We're seeing they're getting between $500 and $1,000 back more than they were last year," Hauser says of many clients who are permanent residents. 

One reason is that the Northern Residents Tax Deduction has increased this time around. 

Rate increased from $8.25 a day to $11

Yukon MP Larry Bagnell calls the increase of about one third "a huge increase." 

"This year people will notice it in their taxes, they're noticing it and it will really help people have a more equal life to people in the south," he says.

The change to the deduction was announced during last year's federal budget.

"Myself and the other Northern MPs lobbied hard for this," says Bagnell.

"We think the fundamental part of a Northern strategy is to support the people, and one of the best ways of doing it is to help them with the high cost of living in the North." 

The $11-a-day rebate can be doubled for people who live alone or are the only ones in their household who claim the deduction.

The benefit applies only to people who have lived in what's called a prescribed Northern zone continuously for at least six months. The zones include all communities in Yukon, the Northwest Territories and Nunavut, as well as selected remote communities in provinces.

Hauser is advising clients to make sure their documents are organized to prove residency.  

"The biggest thing is there needs to be proof. Revenue Canada is verifying that every person that makes that claim has to have proof they are eligible. The biggest drawback that we find is that people say they've lived in the North, their T4 says they work in the North, but they don't have proof that they maintain a residence."