N.W.T. MP vows to keep an eye on Northern tax reviews

The Northwest TerritoriesMP says he'sgoing to keep watch on the Canada Revenue Agencyto make sure Northerners aren't getting overly reassessed on their taxes.

"I see the minister on a regular basis," saidMichael McLeod. "We will stay in touch and ask for regular updates."

McLeod's comments comeafter Minister of National Revenue Diane Lebouthillier committed to examiningthe rate at which Northerners' taxes are reassessed. ACBC report revealed last month that the reassessment rate across the territories is around three times the national average.

• IN DEPTH |Federal minister to look at 'abnormal' number of tax reviews in Northern Canada

McLeod addressed the matter at a federalfinance committee meeting lastFriday. He asked Lebouthillierand the CRA's deputy assistant commissioner of compliance, Ted Gallivan, to talk about how the agencywill deal with the issue.

"We need to be leading with education, with rules clarification," Gallivansaid. "And then follow up with a lighter touch on substantiation."

Gallivan said itisn't an issue of aggressive tax-planning, but rather that Northerners are "trying to access the benefits they're entitled to."

"What the minister has asked us to do as a philosophy is review our compliance actions and choose the right intervention for the right behaviour," said Gallivan.

Expecting to fix the problem

McLeod said N.W.T. residents have brought up the issue of tax reassessments to him since he was electedabout two-and-a-half years ago.

"I'm happy that the CRA has recognized that there is a concern and I'm happy that the minister has committed to taking a closer look at the issue," he said.

McLeod is waiting on statistics from Lebouthillier on how widespread the problem may be.

People are complaining that they shouldn't have to do it on a continuous basis every year.- N.W.T. MPMichael McLeod

"I'm totally expecting that we're going to fix this problem," he said.

McLeod also said he's spoken with the MPs for Nunavut and Yukon,and that bothtold him they've heard the same complaints from their residents.

"People are complaining that they shouldn't have to do it on a continuous basis every year," said McLeod.

Many Northerners have shared their storieswith CBC of continuous reassessment from the CRA.

• Northerners share their CRA horror stories in wake of tax review story

Lebouthillier declined an interview, but Press Secretary Jeremy Ghio said in an email that"the Minister is committed to improving services to Canadians, including those living in remote areas."

Ghioalso said Lebothillieraskedthe CRA to "work on establishing how processes can be improved for northern residents."

Hard to comply with tax law

Andy Wong, who has worked as a tax accountant in Yellowknife for over 30 years, said the CRA always reviews two claims: the Northern residents travel deduction and the moving expense.

He said these are typically larger claims that the CRA flags, which can be a problem for residents.

"I have never seen a taxpayer, who does their own taxes, claim the travel deduction correctly. Never," he said. "It is virtually impossible to comply with the tax law regarding travel deduction."

Wong said residents need to be careful when applying for these claims, and to make surethey have receipts as proofbecause it's more than likely that they will be reviewed.

But he doesn't think anything will change in the near future, and the problem is "something we are going to have to live with."