Richard Gleeson
Northern News Services

Yellowknife (Nov 12/99) - City council is currently waiting for the federal government to put together a more palatable option than the two-year tax holiday proposed for Giant.

"Council and myself are pretty adamant that the city is not going to take the hit," said Mayor Dave Lovell.

The tax holiday, and thereafter linking taxes to the price of gold, was proposed by Miramar as a condition of its purchase of the Giant property.

The federal government's involvement in the tax issue remains unclear.

Department of Indian Affairs and Northern Development (DIAND) spokesperson Dave Nutter said earlier this week property taxes are a municipal not a federal issue and his department made no commitments to Miramar about a tax reduction.

"It was part of their overall proposal (to receiver PriceWaterhouseCoopers)," said Dave Nutter of DIAND.

Asked what involvement the federal government had in discussion of property taxes during negotiations, Nutter responded, "to the extent that (DIAND said) the city had to be involved in those discussions, and that's what's happening now."

The general sentiment on city council is that if property taxes were part of the deal, the city should have been consulted at the time.

"Taxes were on the table," said Lovell. "Miramar never made any secret about it. But no one came to the city to say we're asking the city to take a $2-3 million tax hit."

The more than $1 million tax bill the city was stiffed with when Royal Oak went bankrupt is also an issue. Technically, if another company buys the property it is responsible for the unpaid taxes. If no buyer surfaces, the taxes would be written off.

Taxes on the property will be going down whether a deal is struck or not, the city was told last month, because buildings and equipment will be removed as part of the surface cleanup of the mine. Taxes were $738,000 in 1998. How much they would be reduced would be gauged by assessors when, and if, Miramar starts operating on the property.

City councillors met with territorial and federal officials in an attempt to clarify the tax issue.

The discussion ended with a commitment on the part of the federal government to bring forward an alternate proposal for dealing with the issue.

The proposal, said Nutter, is being prepared at DIAND's headquarters in Hull, Que. He did not know when it would be presented to council.