YK residents raise frustrations over property tax increase
Some Yellowknife residents are criticizing city council’s decision to increase taxes by 9.04 percent for homeowners this year.
A majority of city councillors last week agreed to adjust mill rates – which split the tax burden between homeowners and business owners, among others – so residential property owners pay a larger share than in previous years.
Councillors who favoured the proposal said they wanted to reverse a widening gap that had gradually placed more of the tax burden on businesses over the past two decades.
The decision means this year’s property tax increase for homeowners will be significantly higher than the previously announced 5.56-percent hike, which was already one of the larger increases City Hall has ever passed.
Yellowknife resident Tom McLennan said he disapproves of a more than nine-percent tax hike during a year when inflation is at historically high levels in Yellowknife.
He pointed out that the Yellowknife Chamber of Commerce requested that the city establish a mill rate policy and had asked only that any changes to mill rates avoid increasing the burden on businesses. City staff also recommended that councillors leave mill rates unchanged.
“It’s frustrating when the advocacy group came forward and suggested a better way, and then council makes a change that creates unnecessary harms to residents,” McLennan told Cabin Radio, adding the timing of the decision is “pretty shocking.”
McLennan said establishing a mill rate policy or philosophy would be more effective at addressing concerns about tax imbalances than a one-time change.
Rob Warburton, president of the chamber, said while it’s “appreciated” that commercial property owners will face a smaller tax increase of 2.27 percent this year, that’s not what the chamber asked for.
He said the request to establish a mill rate policy will now have to be “punted to the next council” with a municipal election coming up, and those councillors will have to “reinvent the wheel.”
Warburton pointed out many business owners are also homeowners who will be impacted by the nine-percent tax increase.
“This is not like it doesn’t hit everyone,” he said.
Warburton said he was “quite surprised” by councillors’ decision but he sympathizes as, in his view, they were in a “no-win” situation.
Yet Warburton believes there were other options available.
He pointed out that the city ended 2021 with a $15.8-million surplus and a balance in its general fund at 24.7 percent of budgeted expenses – well above the city’s policy of 10 to 15 percent, meaning there is more money in the general fund than the municipality would ordinarily expect to keep there.
While city staff advised councillors to maintain that larger-than-normal cushion to weather impacts from Covid-19, Warburton questioned how such a surplus will be used.
In December 2021, councillors decided to use $2 million from the general fund to reduce tax increases by nearly eight percent. City staff at the time cautioned that the move should be a one-time-only occurrence.
Mayor Rebecca Alty was among the minority of council members who recently spoke against the nine-percent tax increase. She said next year would be a better time to adjust mill rates, when new developments could help spread out the tax burden.
“I know it’s not easy. Businesses have been impacted by Covid and inflation, residents have been impacted,” she told Cabin Radio.
“My preference at the time was to distribute it the same, the five percent amongst everybody, but the majority of council wanted to shift that.”
Alty said developing a mill rate policy should be one of the first things the future council discusses.
“It really should be up to the next council on how taxes should be distributed,” she said.