There is likely to be no change to Yellowknife’s planned property tax increase as a result of the Covid-19 pandemic.
Councillors have been examining what would happen to the City of Yellowknife’s finances if they wiped out a planned 1.63-percent increase to provide some relief to residents during the economic crisis.
Staff said doing so would push up tax increases in future years, which are already expected to be higher.
Even keeping this year’s 1.63-percent increase, the City forecasts property tax increases in the region of eight percent, five percent, nine percent, and three percent over the next four years.
“I don’t think it would be prudent to start changing things. Anything we take away now is going to hurt more later,” said Councillor Julian Morse.
Councillor Shauna Morgan said: “If we reduce property taxes this year, clearly that would have an impact on next year and the years forward. We would have a sharper spike in property tax increase.
“[Continuing as-is] will smooth out the shocks we perhaps need to prepare for in the coming years. It makes more sense to continue with the planned path, looking at the long term and given there are a lot of unknowns in the future.”
Mayor Rebecca Alty said she supported keeping the “modest” 1.63-percent increase in place, saying those unknowns include the impact of a second or third wave of Covid-19 and how the NWT government chooses to ease pandemic restrictions.
‘Prudent to hold on’
The 1.63-percent increase is expected to mean an annual cost of between $20 and $60 for most Yellowknife residents. Keeping it in place would save the City half a million dollars compared to wiping out the increase, staff said.
Councillor Robin Williams, who had initially expressed enthusiasm for abandoning the increase, said on Monday a memorandum from staff had been “enlightening” and he now agreed “it might be prudent to hold on with relief until we know a bit more.”
Williams said Budget 2021 could be a better place to consider relief for residents, once the impact of Covid-19 was clearer.
If the City’s memorandum is approved by council, this year’s property tax increase and a standard increase in fees and charges for City facilities will go ahead as planned.
The City has implemented various temporary changes in the wake of Covid-19, including a pause on parking charges and the waiving of some late fees.
City Hall is sitting on a $6.7-million surplus from the past year, some of which will be burned up by those temporary measures. Revenues have dropped significantly, which staff expect “will continue … for the foreseeable future.”