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SOMBA K'E/YELLOWKNIFE - Yellowknifers have seen a steady flux of tax increases over the past five years and, if things go as city administration has planned, the 4.75 per cent tax hike proposed for 2009 will only herald more to come.

The city has "a greater than 15 per cent increase in taxes planned for the next three years in a time where we have an economic slowdown," said Jon Jaque, president of the Yellowknife Chamber of Commerce.

Last year's increase passed at 2.98 per cent. While this year's proposed increase is pegged at 4.75 per cent, the 2010 increase is a proposed 5.84 per cent and the 2011 proposed increase is 5.89 per cent. If approved, next year's increase would work out to about $34 for every $100,000 of taxable assessment, or $71 on average per household, per year, according to Carl Bird, the city's director of corporate services.

"I think it's a very, very poor time to look at increasing the tax base," said Jaque, who added the high cost of living in the North is already driving people out.

"They have to look inwardly before they can look outwardly in these troubled times."

Jaque said in the last 12 years the territory's economy has been hot, with Yellowknife a major beneficiary of all the activity.

"People have been very busy, businesses have been very successful in moving forward ... and maybe a little less concerned about rising costs and rising taxes. That's changing," he said.

Earlier this week Bird said one of the main driving factors behind the tax boost is an increase in the salaries for all unionized city employees – excluding firefighters and municipal enforcement members – which was negotiated early this year between the City of Yellowknife and Public Service Alliance Canada, represented by the Union of Northern Workers.

The increase, which was finalized in February, allowed for a 3.5 per cent increase in salaries for unionized city employees in 2008, a four per cent increase in 2009 and a 6.5 per cent increase for 2010.

While Bird acknowledged the pay boost was only for unionized employees under PSAC, he added when union members' pay increases, non-union members usually get increases as well.

City spending on salaries and benefits has risen to a recommended $18.3 million from $14 million in 2005. Staffing has risen by more than 20 positions since 2004, with most of the rise posted in the community services department (about seven hires) and the public safety department (about eight hires).

Todd Parsons, president of the Union of Northern Workers, said he doesn't doubt labour costs, like increased salaries, have contributed.

"I understand the city's need to push back and say this is where our real costs are increasing and I'm sure successful negotiations increase the employers' costs somewhat as well," he said.

But things also need to be put in perspective, he said.

"The cost of living (increase) for the Northwest Territories in the past 12 months has been in excess of four per cent," said Parsons.

He added the increase is similar to other pay increases the union has negotiated to cover costs of increased living. The increase, he said, "is consistent, if not below, the average salary increases that we've been successful with as a union in the North with our other units."

Alternatives North spokesperson and former city councillor Ben McDonald said there is nothing unfair about employees being paid a good wage.

"The city has got to recruit people and the people they employ have got to be paid at competitive salaries," he said.

"I don't think there's anything inappropriate, and Alternatives North doesn't think there's anything inappropriate, in people being paid a fair wage," said McDonald, noting the organization is drafting a letter to the city in regards to the budget.

"There are a number of factors the city should be acknowledging," said Parsons, citing higher petroleum and fuel costs, both of which were also mentioned by Bird as factors.

"It's probably safe to say the public is going to start pushing back, saying what exactly and how exactly are you using our monies," said Parsons.

City revenues, expected to be $58 million in 2009, come from three main sources: taxation (a proposed $19.8 million), government transfers, such as grants (proposed at $18.5 million) and user charges (a proposed $19.3 million).