SOMBA K'E/YELLOWKNIFE - Fee increases proposed in the 2011 draft budget, including a $50 increase to business licences and an average nine per cent increase to tipping and solid waste fees, passed first reading Monday night.

Only two councillors - David Wind and Paul Falvo - were opposed.

The second and third readings were scheduled for last night.

The $5 fee charged at the landfill gate - controversial when introduced in 2005 - is going up to $7. The cost of commercial business licences meanwhile, is proposed to go up to $200 from $150, matching the current cost of home-based business licences.

Wind and Falvo opposed the increase, arguing the city needs to encourage business growth in Yellowknife.

"I think we should do more to foster and encourage small businesses," Falvo said at city hall Monday. "The problem with the one-size-fits-all approach here is that a very large business is paying the same price as a much smaller one."

Carl Bird, director of corporate services, said the hiked fee covers the cost of processing the business licence and ensuring people follow the city's business regulations.

If passed at the special council meeting last night, which began after press time, it will be the second year in a row business licence fees have increased by $50.

Wind said based on a list of 13 Canadian cities and their business licence fees, presented to council in the Municipal Services Committee agenda Monday, he doesn't believe the argument that the increase is just to recover the cost of processing the licences but rather it's an attempt to generate more revenue.

"What's happened is that the case is made in terms of making a comparison to other cities, some of the cities being much, much larger," said Wind.

He pointed to the list provided by administration and noted that the fee for both home-based businesses and commercial businesses in Whitehorse, "our sister capital," is $144, less than Yellowknife's current $150 fee.

"It's my feeling that the city should do its best to reduce the costs as much as possible to make sure they're not providing a disincentive for businesses to come into operation, rather than to look at licensing as a way to generate revenues," he said.

Warren McLeod, president of the Yellowknife Chamber of Commerce, told Yellowknifer Tuesday that the chamber wouldn't support the increase of fees unless the city justifies them by providing more services to businesses.

He said the chamber's board hasn't yet discussed the proposed increase, but it could be a disincentive for people in Yellowknife who are starting a business.

"It might deter them from starting something up, which hurts them," McLeod said.

Coun. Bob Brooks spoke in favour of the increase, arguing it will prevent an additional increase to the 2011 draft budget's proposed 3.99 per cent property tax hike.

He said in terms of the average nine per cent increase to tipping and solid waste fees, it is a move towards a user fee system.

"It's going more toward the users that are actually using the facilities," he said. "While it is a nine per cent increase, it means that we won't increase the general tax increase to approximately 4.2 per cent instead of 3.99 per cent."

The increase to tipping and solid waste fees is proposed as a way to pull the solid waste management fund out of a forecasted $120,000 annual deficit. Coun. Mark Heyck said nine per cent is a steep increase, but it was a needed correction to ensure the fund operates with a balanced budget.

If passed at the third reading, all proposed fee increases,plus one decrease for scrap wood disposal will come into effect Jan. 1.

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