City proposes 8.05% tax increase in YK’s 2025 draft budget

When Yellowknife councillors head into budget deliberations next month, they will have to consider a proposed 8.05-percent property tax increase.

Kavi Pandoo, the city’s director of corporate services, gave that figure as he presented 2025’s draft budget to council on Tuesday.

That isn’t a finalized tax increase. Council can bring that number down if it chooses to cut some of the planned budget items or finds other ways to cover expenses.

“The City of Yellowknife is at a crossroads, not only with the way it does business and the services it offers, but also because of macroeconomic factors like volatile market conditions, climate change and stagnating tax base,” Pandoo said.

He added that while city infrastructure and finances will face challenges in the near future, that does not mean he is “saying the sky is falling.”

“We have a collective responsibility to make sure it stays that way by having difficult conversations and making hard choices to bring the focus on building stronger foundations for growth,” he said.

City manager Stephen Van Dine said staff were “proposing a budget that we believe strikes a balance between being … fiscally responsible but also allowing for key investments.”

The draft budget proposes expenses of $143.8 million. Of that, 28 percent goes to wages and benefits, 27 percent to capital projects and 23 percent to operations and maintenance. After adjusting for amortization, total expenses are $127.4 million.

The budget projects $110.2 million in revenues with 38 percent of that coming from property taxes, 33 percent from government grants and 26 percent from user fees and charges.

The city is required to deliver a balanced budget every year.

As proposed spending is more than the expected revenue, Pandoo said city staff recommend transferring $17.2 million from existing internal funds to cover the gap.

How much could your taxes increase?

If the proposed eight-percent increase is approved, the extra property tax residents and businesses would have to pay next year depends on the assessed value of their property.

For commercial properties valued at $750,000, for example, owners would have to pay an additional $847 in 2025 if the increase is approved and the commercial mill rate remains unchanged. For commercial properties valued at $1 million, the increase would be $1,129. It would be $1,412 for properties valued at $1.25 million.

Owners of residential properties valued at $250,000 would see a $133 increase. It would be $239 for properties valued at $450,000 and $345 for properties valued at $650,000.

Pandoo said city staff recommended the 8.05-percent increase to meet the expected cost of capital projects, operations and maintenance. He said it is comparable to property tax increases being proposed by other Canadian municipalities with similar population sizes.

City staff currently project that Yellowknife’s 2026 budget will include a 9.27-percent tax increase and the 2027 budget a 7.02-percent increase.

City councillors will ultimately decide on the property tax increase that comes with the final budget.

Last year, for example, city staff proposed a 7.22-percent property tax increase in the draft budget. Ultimately, councillors approved a final budget with a five-percent tax increase.

Where does the city plan to spend?

The draft budget for 2025 earmarks $53.3 million toward infrastructure projects, including $15.9 million for replacement of lift station one, $6.8 million to replace water and sewer infrastructure, $2.3 million for renovation and expansion of the fire hall, and $4.5 million to expand the landfill or create a new one.

“With multiple major [pieces of] infrastructure coming due for renewal in the near future, the rapidly rising cost and volatile market conditions, it would appear that we are about to hit the high seas on a dinghy pretty soon,” Pandoo said, referring to the city’s 10-year capital plan.

He said the city’s debt situation adds a further challenge, with a current total of $18.3 million remaining in loan repayments. In 2025, he said, the municipality plans to repay $2.9 million toward that balance.

Pandoo said while the city has room within its borrowing limit, the $10-million loan it took to help build the new aquatic centre – which was approved through a referendum in 2021 – will hurt City Hall’s borrowing ability until 2027.

“Simply put, we might not be able to borrow any funds in the next three years until our debt service balance improves,” Pandoo said.

“Needless to say … government grants will become a crucial source of funding for our capital projects in the coming years.”

Requests from residents that made it into the 2025 draft budget include:

• $310,000 to resurface sports courts;
• extra lifeguards and swim guards to staff the new aquatic centre and increase access to swimming lessons;
• two additional municipal enforcement officer positions to address gaps in service; and
• a new online system to book programs and facilities.

Other one-time costs Pandoo highlighted in the 2025 budget include:

• $112,000 for city council election-related expenses;
• $150,000 for an information technology audit;
• $60,000 for software acquisition and implementation;
• $100,000 for a contractor to complete plan reviews;
• $25,000 for a hazard risk assessment;
• $10,000 for dam inspections;
• $300,000 for two positions to implement a modernization initiative; and
• $75,000 for an organizational review of the city’s staffing structure.

Councillors and members of the public can submit questions and feedback on the budget to the city by email from now until November 24.

Any member of the public asking to make a presentation on the budget will be able to do so on November 25.

Councillors are scheduled to deliberate the budget between December 2-5 and approve a final budget on December 9.