Iqaluit (Dec 22/03) - City taxes are going up 2.25 per cent to help pay for increased capital spending in 2004.

This year's capital budget is set at more then $9.2 million dollars while the operational budget came in at $17.2 million.

The increase in spending didn't come as any surprise to Iqaluit council, as these projects have been in the works since October.

Ian Fremantle, chief administrative officer for the city, said the city borrowed $5.5 million as part of the Capital Funding Agreement with the Nunavut government and the tax increase will supply the rest of the $9.2 million needed to complete the projects.

"Taxpayers agreed to the tax increase when they voted in the plebiscite," he said.

Brad Sokach, director of public works and engineering, said the money will be used to cover the cost of paving, upgrades to the water and sewage treatment plants, maintenance of bridges and gravel and sand.

Council has also committed a total of $350,000 for sidewalks and trails.

The operational budget won't see much of an increase this year.

Fremantle pointed out that none of the departments could afford any major increases.

"The budget this year is quite tight," he said.

The budget was passed Dec. 12.