The City of Yellowknife projects an 11.92-percent tax raise would be needed to balance the 2021 budget, but mayor and council promise any increase they approve will be “more manageable.”
City administrators on Monday told councillors a “considerable” tax increase would be needed to make up for a decreased surplus due to Covid-19, but there is little to no chance of such an increase coming to pass.
“I don’t want residents to think we’re totally out to lunch here,” Councillor Julian Morse said.
Councillors Morse and Shauna Morgan joined Mayor Rebecca Alty in reassuring residents that any tax increase in the city’s final budget won’t be nearly as high.
The 11.92-percent figure comes from a draft budget presented to councillors on Monday.
It is common for the initial tax increase in Yellowknife’s draft budget to be several times higher than the one that’s eventually approved. For example, last year’s draft budget called for an 8.48-percent tax increase. Council ultimately approved an increase of 1.63 percent.
“Sometimes the proposed tax increase can seem a bit scary, but it’s simply part of the process,” said Morse.
City administrator Sheila Bassi-Kellett acknowledged the 11.92-percent increase would likely appear “tone deaf” during the pandemic.
However, she noted Yellowknife’s discussion isn’t out of line with those in other municipalities.
In Vancouver, councillors are being told to make “trade-offs” to bring down a proposed 12-percent tax increase. In May, Toronto’s mayor claimed a 47-percent tax increase would be needed to maintain services if the city didn’t receive more financial aid.
‘Political decision’ to be made
City staff proposed a number of options to reduce taxes. Eliminating travel and meeting costs is one proposal. Another is staggering paving, water, and sewage projects so they take place every other year, not annually.
“Now it is up to council to apply the political lens and make the political decision,” said Sharolynn Woodward, the city’s director of corporate services.
The city is expecting help in the form of one-time pandemic funding from the territorial government. MLAs are set to vote on that funding in the legislature this week.
Unlike the territorial or federal governments, the city cannot legally plan a deficit. It must balance its budget each year.
Woodward said balancing the 2021 budget was particularly challenging as the pandemic has made estimating revenues and expenditures difficult.
“It continues to haunt us with its unprecedented uncertainty,” she said.
Residents are encouraged to share with council their questions or comments about the draft budget, and can make public presentations about the budget on November 16.
Mayor and council will deliberate the budget between November 30 and December 3. The final approved budget is expected on December 7.