Iqaluit proposes small tax hike in largest budget ever

Iqaluit’s 2010 budget is shaping up to be the largest ever, and homeowners will have to absorb a small property tax hike to pay for it.

On Feb. 28, the city’s committee of the whole voted in favour of a 0.5-mill hike to all categories of the city’s mill rate, leading to slight increases in property taxes for 2010.

This means the owner of a house assessed at $60,000 would face a tax hike of around $30 per year.

Taxes on $200,000 home would rise just over $100 a year.

The tax hike is the same as that imposed in 2009, which was the smallest such increase in years.

The budget vote followed four days of presentations to city councilors by the city’s departments to explain their operating costs and revenues.

Mayor Elisapee Sheutiapik said she was “disappointed” to be raising property taxes this year.

After some debate, she and the rest of the committee passed the tax hike unanimously.

The 2010 budget is the city’s largest ever, worth $37 million: $11 million in capital spending, $6 million in residential development and $20 million for general operations.

The costs of necessities like power and fuel – mostly – continue to rise, so operating costs are constantly increasing.

This year most of the city’s continuing infrastructure projects are at the stage of conducting feasibility studies, so there are few big capital items to pay for.

But over the next few years, the mayor warned, the city has several projects that will get expensive, such as a new recreation complex, a new swimming pool, a new city hall and a new fire hall.

That means bigger property tax hikes, she said.

The 2010 mill rate increase is worth roughly $160,000 in city revenue.

That is part of the city’s 2010 budget surplus of around $100,000, a small figure when compared to the eight-digit overall budget.

The small surplus, chief administrator John Hussey said, is necessary to cover unforeseen costs to the city, such as a disaster or an unexpected rise in costs such as power or fuel.

The city is also going to charge more for water services.

The city is raising its water rates by 2 per cent, with the money to go towards repairing and upgrading Iqaluit’s aging water system.

For example, Hussey said there’s an aged pipe that is prone to major leakage at the bottom of the Road to Nowhere.

Without permanent repairs, such problems demand frequent overtime labour to perform emergency repairs, which is more expensive in the long-term, he said.

In the case of residential properties, the price increase is actually a reduction in the city’s water service subsidy, Hussey said.