The Canada Revenue Agency has published lowest return airfares for the first time in a bid to simplify the process of claiming the Northern Residents Tax Deduction.
For any northern resident, claiming the deduction relies in part on knowing the cheapest round-trip airfare that would have been applicable at the time of your travel south.
This normally sets off an annual rummage through websites, receipts or any other guide to try to establish what that airfare might be. In most years, a benevolent NWT accountant would come to everyone’s rescue with a Facebook post listing airfares – from which residents obediently copied out answers.
Peter Fragiskatos, parliamentary secretary to the minister of national revenue, said complaints about the arcane airfare scramble were the number-one issue he heard on a recent trip to Yellowknife.
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“It was coming up in almost every meeting that I had,” Fragiskatos told Cabin Radio on Tuesday.
This tax season, to address that, the CRA has published what it believes to be the lowest return airfares for 135 airports on its website. The agency hired a third party in the travel industry to compile the tables, and says that means the frustrating hunt for answers is over.
“We heard what citizens had to say,” said Fragiskatos, who said the tables “advance a larger goal, which is helping northern residents.”
He acknowledged, however, that not everyone may agree with the figures.
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For example, the CRA’s tables list the lowest return airfare between Yellowknife and Edmonton from April to September 2022 as $493.76.
For the same period, Canadian North – publishing a table of its own – said the lowest return airfare was around $1,000.
One resident contacting Cabin Radio said the CRA would be “out to lunch” if it believed its quoted airfares were the lowest available. “Airfares have been higher than ever the last year and I’ve lived here for 20 years,” they said.
Fragiskatos, responding to that concern, said the old way of filing – finding your own lowest airfare to quote and keeping relevant receipts – remained an option.
“It could be that people disagree with the figures in that table, and that’s why they can submit documents in the way that they always have in order to secure a more favourable deduction,” he said, adding that the CRA’s quoted figures represented “a seasonal average.”
“Gone are the days when people at the last minute had to find the lowest return airfare,” he said, “but if they want to use that former approach, they can still do that.”
Fragiskatos said a forthcoming consultation would allow residents to provide feedback on the new approach to the travel deduction, which he characterized as a pilot project that the CRA was prepared to amend if a better process emerges.
That consultation will begin on March 7, with information to follow on the CRA’s website.
“Based on that feedback, it could change. We do want to listen and if there’s a need to modify the approach that’s being taken, we would certainly consider doing that,” he said.
“We want as simple a process as possible.”
