Yellowknife city councillors have approved changes that result in a nine-percent property tax increase for homeowners in the municipality this year.
At a Tuesday evening meeting, a majority of councillors voted to reduce the mill rate ratio – how much tax business owners pay relative to homeowners – from 1:2.26 to 1:2.13.
That means, come tax time, commercial property owners will see a 2.27-percent tax increase, while taxes for residential property owners will jump by 9.04 percent.
Councillors made the change in response to a gradually widening tax gap that has placed more of the tax burden on commercial property owners over the past two decades.
“I see this as just the most minor of shifts back to right a ship that was wronged a long time ago,” Councillor Robin Williams said.
“I don’t want to put my faith in the future council that they’re going to do what’s right for the business community.”
Niels Konge, who also supported the change, said the previous mill rate ratio was a “throwback from the gold mining days in Yellowknife.” He added it would take time to balance the tax spread between businesses and homeowners.
Konge pointed out that for homes valued at half a million dollars, the adjustment will result in homeowners having to pay around $10 extra each month in taxes. Owners of commercial properties with the same value, meanwhile, will save $145 in taxes this year.
“It’s not huge but it does help,” he said.
“At this time, the businesses in this town, they need more help than the residents.”
Councillors Cynthia Mufandzedza and Stacie Smith joined Williams and Konge in voting in favour of the tax shift.
Not everyone agreed with the decision.
Councillor Julian Morse said some residents had voiced concerns about facing a nine-percent tax increase in one year. He instead proposed smaller changes to mill rates among the six different property classes in Yellowknife that would soften the blow for residential property owners.
Echoing earlier comments from Mayor Rebecca Alty, who was not present at Tuesday’s meeting, Morse argued next year would be a better time to reduce the commercial-residential mill rate ratio. Alty had pointed out the development of Įtł’ǫ̀ School and possibly more multi-residential dwellings in Yellowknife – both considered different property classes than residential – could further spread out tax burdens. Morse said that would prevent shifts in the mill rate ratio from “shocking the system.”
Morse added that would give the new council, following this fall’s municipal election, more time to discuss and establish a mill rate policy.
“This is a way to balance things out. Doing this will mean commercial and residential will receive a relatively equal tax raise,” he said.
Councillors Shauna Morgan and Steve Payne agreed with Morse.
“To change the ratio this year … would create this sudden and unexpected leap for residential tax payers to nine percent, which is far more than people expected and it would be quite sudden and quite a shock,” Morgan said. “I think it’s not a good idea at this point.”
City staff had earlier recommended that councillors maintain the existing mill rate ratio, which had not changed since 2019.
The Yellowknife Chamber of Commerce supported that option, asking only that any changes to mill rates not increase the proportion of tax business owners pay relative to homeowners.