Ratepayers protest property tax hikes
City of Iqaluit expects to spend 21 per cent more than in 2014
Casey Lessard
Northern News Services
Published Monday, January 26, 2015
IQALUIT
If you live in the capital of Nunavut and thought life was expensive, as the saying goes, you ain't seen nothin' yet.
Speaking at a homeowners meeting after the city's property tax increases arrived in the mail, Cam McGregor warns fellow homeowners that the aquatic centre could "cripple this community" if it forces the city to overextend its capital. - Casey Lessard/NNSL photo |
Already living in a city plagued by high rents and food prices, Iqaluit's residents are being squeezed harder this year as property taxes go up significantly, and water rates and garbage fees increase by six and 10 per cent, respectively.
Those who live and shop in the community will see the effects, said finance committee chair and councillor Kenny Bell, as landlords and businesses pass the bill on to their tenants and customers.
"Regardless of whether you pay taxes or not, you're going to pay for it in the long run," Bell said.
Although city council voted last month to limit the property tax increase for single-family homes to seven per cent, a 21 per cent increase in the city's operating liabilities - to $17.5 million from $14.4 million - means residents are going to feel the pinch through trickle-down effects.
"I just worked out my taxes this morning from the information now available," said Stu Kennedy, who owns a mix of residential, commercial and industrial properties. These include the DJ Specialties convenience store and the building that houses Nunavut News/North's office.
"Our warehouse (considered industrial) taxes are 57.5 per cent higher than last year. The store (commercial rate) is more than 61 per cent higher than last year."
These numbers are far higher than average, but they mean Kennedy will pay an additional $9,600 in taxes on those two buildings alone.
"For a typical two-bedroom apartment," he told News/North, referring to apartment buildings he co-owns through Tumiit Development, "the tenant will be responsible for a $40 to $60 increase."
The increase reflects a required investment in the Happy Valley sewage line and interest for the new aquatic centre, among other things. But starting next year, the loan repayment and the operating expenses for the pool will total about $3.6 million per year for its life, said Bell, so council will have to work hard to avoid another big bump in 2016.
One homeowner suggested Bell should not have brought up the aquatic centre, which Bell opposes, at a debate about property taxes, but Bell disagreed.
"This is part of the reason it had to go up," Bell said.
"We had to raise our borrowing capacity this year because we needed extra funds. We had to put $4 million cash into a fund at the Bank of Montreal so we could afford to even lend the money. These are all things that are adding up to why we're in this situation."
Cam McGregor said that two cities - Watrous, Sask., and Montreal - overextended their capital and took decades to recover.
"Something that has a 25 per cent impact on the current budget forever is something that concerns me," McGregor said.
"We can cripple this community by overextending our capital expenditures."
"We have $30 million in pipes that need to be replaced, our road system is in utter disrepair, we have no drainage. Our basic necessities are not there," Bell said.
"It is 40 years of sweeping things under the rug that is coming to light now. We got warnings from the federal government saying we could go to jail if we (council) didn't do certain things. Sadly we're paying for 40 years of mismanagement."
For those unable to interpret their tax bill this year, Bell said assessment values almost doubled but the mill rate was adjusted down to reflect the change.
The mill rate - which is the amount of tax billed per $1,000 of assessed value - will be 15.12 for single-family dwellings (seven per cent more than 2014) and 24.5 for multi-family dwellings (24 per cent more) in 2015.
The commercial rate is increasing by 21 per cent, while industrial ratepayers pay 31 per cent more. The institutional rate is increasing by 25 per cent. But as Kennedy's experience shows, the re-assessment can lead to much bigger increases on the tax bill.
He thinks the focus on increasing commercial taxes is a threat to the business community.
"Only a fool would not be concerned," he said. "A disparity is growing, and I don't think you can continue to do that."
