Yellowknife councillors work to find tax reduction options


Yellowknife city councillors considered a number of options to reduce taxes during a second night of budget deliberations on Monday, ultimately cutting $250,000 in spending.

The municipality’s 2022 budget, as first presented last month, proposed a hefty tax hike of 13.44 percent due to rising inflation, the continuing impact of Covid-19, and the need for more staff and infrastructure upgrades.

City staff on Monday night suggested a few ways councillors could reduce that figure.

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“When we come forward with a 13.44-percent proposed tax increase, that has a little sticker shock and certainly many councillors have said they have some concerns around that,” city manager Sheila Bassi-Kellett said.

“There is also an understanding that … costs are going up and that the reality of delivering the services that we do does require that we’re resourced to be able to do that.” 

Sharolynn Woodward, the city’s director of corporate services, said some areas where councillors could cut spending in the budget include deferring corporate rebranding, eliminating Covid-19 funding, or delaying assessment of the Ruth Inch Memorial Pool building for repurposing.

Woodward also discussed the option of eliminating the transfer to capital – which provides money for various forms of municipal construction – but advised that would not be sustainable as the city’s infrastructure is ageing. Alternatively, she said, some capital projects could be deferred or spread out over a longer period of time, like accessibility implementation, although that would result in delays. 

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Charts from city staff detail ways councillors could reduce taxes in the 2022 budget.

Finally, Woodward said, a one-time solution could be to take $2 million from the city’s general fund to cover some of the tax revenue shortfall, which would reduce the tax increase by more than six percent.

The city’s budget policy states the general fund should remain between 10 and 15 percent of budgeted expenses. In 2020, higher income and lower-than expected costs gave the city a higher-than normal general fund balance, which is currently sitting at around 25 percent. 

Councillor Niels Konge questioned the $2-million figure and what would happen if councillors drew more money from the general fund, returning it to the 10-to-15-percent mark. 

Bassi-Kellett said city staff were “super uncomfortable” with that idea as it could mean a tax spike in 2023. She added the city wants a “cushion” during the ongoing uncertainty of the pandemic, particularly as the territorial government has said it will no longer fund communities to address the impacts of Covid-19. 

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Councillors unanimously voted to remove $100,000 for Covid-19 contingency from the city manager budget, deferred $100,000 in spending for corporate rebranding, and reduced spending on general services in the mayor and council budget by $50,000. 

Unlike the territorial or federal governments, the city must legally balance its budget, meaning it cannot plan a deficit. 

The city’s draft budget often proposes a much higher tax increase than the one councillors ultimately approve. In 2021, for example, while the budget first included a tax increase of 11.92 percent, councillors approved a budget with a 2.5-percent tax increase.

Budget deliberations continue on Wednesday at 5:30pm. Councillors are expected to approve the budget on December 13.