Nathan VanderKlippe
Northern News Services

Yellowknife (Jan 16/02) - Contractors building residential units downtown this year may get a $1,000 tax credit for every unit installed.

Several city councillors are pushing for the measure -- which originally appeared as a target in the city's downtown redevelopment plan -- to be passed in this year's budget to help alleviate the housing crunch.

"The cry now is housing, housing, housing, and to not include this in this year's budget I think is a mistake," said Coun. Dave Ramsay. "Here's a golden opportunity for us to ... spur some residential development downtown."

Local contractors think the idea is a good one.

"With vacancies the way they are, anything the city does to help spur development I think is a good thing," said Ken Szarkowicz, manager of PCL Constructors Northern Inc.

"If you're going to spend $3 or $4 million on a development for 20 or 30 units, you're talking about a $20,000 to 30,000 tax credit. That's better than nothing," said Hovat Construction owner Eric Sputek.

The downtown redevelopment plan includes 36 target measures -- from installing an outdoor wood stove downtown to issuing tax breaks for downtown renovation work -- that the city is contemplating to improve Yellowknife as a "Northern urban neighbourhood."

One of those is an idea to set aside $100,000 to give out in $1,000 increments to developers building residential units in the downtown.

The problem with inserting the measure into this year's budget is that the city is already facing a deficit, which could mean either cuts in services or a tax hike. Another $100,000 would be an additional burden. It would also create administrative headaches as necessary paperwork would need to be drafted quickly if council decides to include the measure for the 2002 budget.

Saying that housing should be one of the city's top three priorities, Ramsay's solution is to cut services to accommodate the spending on housing. He wants to delay water and sewer work or set aside road paving projects for another year. He also mentioned chopping line-painting projects for this year or a $30,000 ball field planned for Ecole St. Joseph.

Coun. Ben McDonald agreed with him on the need to spur housing, but thinks the money should come in the form of increased taxes.

"I think it has to come through a tax increase," he said. "I'm not keen on cutting public services and I don't know which one I would cut in favour of this program."

Meanwhile, city planner Dave Jones recommended an easier plan to implement. Another target in the redevelopment plan is to give developers a five-year tax break on any improvement work they do in the downtown. Under the plan, commercial developers would effectively see no increase in taxes in the first year after a property assessment is increased. Tax rates would rise in 20 per cent increments until the full newly-assessed value is taxed.

"That one would probably be in theory a little easier to implement because you don't require a budget item for it," he said.