Under a contribution agreement the City of Iqaluit signed last week, the GN will provide about three-fifths of the money for the city's $51 million capital plan.

"Iqaluit has seen extraordinary growth in population since the creation of Nunavut in 1999. As this happens, it is critical that we make a contribution. This is a partnership agreement. We will help the city where they need us to," said Community Government and Transportation Minister Maniktok Thompson.

The agreement will be valid for six fiscal years.

"The city has many demands on its infrastructure which need to be met and which will in part be met by this agreement with the GN," said Iqaluit Mayor John Matthews.

Iqaluit's 2003-2007 capital plan, which outlines how the money will be spent, was approved by city council on Dec. 16.

The budget includes an annual $150,000 for the city's public transit system plus a one-time $100,000 start up cost.

At the same time, the city has found sufficient funds for the operation of both arenas in the capital.

Seventy per cent of the funding, or $35,700,000, will be spent on improving water supplies and developing a sustainable sewage system.

With all this spending, residents of Iqaluit will find themselves paying more in taxes and service fees, including a 2.25 per cent property tax hike in 2003. The city said the increase amounts to about $45 per home per year.

Utility fees will go up by five per cent in 2003. According the city officials, this will mean about $47.25 more for each household.

But the money collected through taxes, utility fees, GN contribution and other ways will still not be enough for the city to do everything that needs to be done.

The city will have to defer closing the solid waste site, and no contributions will be made to the city's swimming pool or a proposed arts and culture centre.

Matthews said the financial strategy in place through this agreement is a start but more liaisons need to be made.

"We do feel there is a definite need for funding from the federal government. We're hopeful this will happen sometime in the near future," he said.

In 2003, the City of Iqaluit will spend $11,305,000 on capital projects and another $14,547,575 for the day-to-day upkeep and delivery of city services.

The public is invited to express their views on the 2003-2007 capital plan at a public meeting on Jan. 21.