Yellowknife Day Care Association denied property tax exemption

The Yellowknife Day Care Association’s request for a property tax exemption worth more than $25,000 was narrowly denied by city councillors on Monday evening.

The association, a non-profit, argued it met the criteria for an exemption under the city’s policy, which grants exemptions to certain charities, community groups, and religious organizations.

However, several councillors – and city staff – argued the association did not qualify as it did not serve a municipal purpose, in other words an activity the city currently governs. (Daycares are a territorial responsibility.)

Councillors ultimately voted four to three on Monday to deny the request.

“It’s a critically important service but does this meet a municipal purpose? That’s where we’ve struggled,” said Sheila Bassi-Kellett, the city’s senior administrator, setting out why staff believed the request should be denied.

“This is not within the purview or jurisdiction of a municipal government to deliver these services.”

Councillor Niels Konge agreed, arguing that the Yellowknife Day Home Association – as an essential business during the pandemic – had been operating and earning money while other businesses had not.

“It is not fair to burden the rest of the residents and businesses of Yellowknife,” said Konge, stating the lost revenue from any exemption would have to be made up elsewhere.

Councillor Cynthia Mufandaedza said granting an exemption to the association “would not be fair,” while Councillor Steve Payne said private daycares should be entitled to a similar exemption if this one went ahead.

“How many private dayhomes in this town also provide a very important service? There’s not a whole lot of profit in private dayhomes either,” said Payne. “If we’re not going to give it to everybody, I don’t think we should give it to anybody.”

‘A really valuable service’

Councillor Shauna Morgan had earlier tried to change her colleagues’ minds on the issue.

“It seems to me the Yellowknife Day Care Association does fit within the criteria we’ve set out for non-profits,” Morgan said.

“It does contribute a really valuable service to this community. It would be unfair to single them out and not allow them the property tax exemption. I can’t see any reason why they wouldn’t fit.”

Morgan, Konge, and Mayor Rebecca Alty agreed that the range of interpretations of the city’s policy suggested the policy itself should be revisited, rather than relying on council to make case-by-case decisions.

A compromise proposal to reduce the association’s property tax bill, rather than delete it or charge it in full, was dismissed.

The only legal means by which to reduce the tax bill would involve artificially splitting up lots as a workaround, which city corporate services director Sharolynn Woodward characterized as a “cumbersome” approach.

Morgan, Alty, and Councillor Rommel Silverio voted against the motion to deny the association’s request. Councillor Julian Morse was not present, while Councillor Robin Williams removed himself from the discussion due to a conflict.

The association had been seeking an exemption on 2020 taxes for its building on 52 Street, which amount to $25,320.

It provides childcare services for about 150 children every year and gets about a third of its revenue from the territorial government, with the remainder coming from fees for its programs and services.

So far, the city has authorized $296,000 in tax exemptions for 2020, which amounts to about one percent of the municipality’s total tax revenue.