Iqaluit demands changes in Nunavut borrowing laws

John Hussey, Iqaluit’s senior administrative officer, at an Iqaluit City Council meeting earlier this year. Hussey said the city is still waiting to hear from the Government of Nunavut about changes the city proposed to the Cities, Towns and Villages Act. (PHOTO BY CHRIS WINDEYER)

The City of Iqaluit wants changes to the territorial law that governs how the city can borrow money.

City officials are worried that provisions of the Cities, Towns and Villages Act prevent Iqaluit from accessing funding for capital projects and restricts who’s eligible to vote in plebiscites to approve borrowing money.

“Every other capital city in Canada can borrow money without going through a plebiscite,” said John Hussey, Iqaluit’s senior administrative officer. “But in Nunavut, the legislation restricts us.”

More than two years ago, the City of Iqaluit wrote a letter to the Department of Community and Government Services asking for changes to the territorial law that governs how the city can borrow money.

Hussey said the city is still waiting for an answer, although Pam Coulter, communications director for Executive and Intergovernmental Affairs, said the GN replied to the city’s letter with a request for more information and never heard back.

Iqaluit is seeking two changes to the Cities, Towns and Villages Act that would allow the city to borrow smaller amounts of money for capital projects without a referendum and extend voting rights for referenda on borrowing to all eligible voters.

The CTV Act forbids the city from borrowing money from anyone other than chartered banks and trust funds. A city may borrow money to make up an operating shortfall, but it can’t borrow money for long-term capital projects.

That means the city is effectively barred from borrowing money from a $500-million Green Municipal Fund run by the Federation of Canadian Municipalities.

That fund for municipal infrastructure, offers the advantage of offering a matching grant alongside any loan, so the city could get $100,000 and only owe $50,000.

But Hussey said the CTV Act’s requirement for a plebiscite to approve any capital spending doesn’t make sense, if the city decides to borrow only a few hundred thousand dollars for a specific infrastructure project.

And he said the cost of running a referendum is between $60,000 and $90,000.

“If you’re going to spend $60,000 to vote to borrow fifty [thousand], what’s the point?”

The CTV Act is one of many laws Nunavut imported from the Northwest Territories at division. It’s been amended numerous times by the Nunavut Legislative Assembly since 1999.

A spokeswoman for the Department of Community and Government Services said the department is open to possible changes to the act, but added there have been no steps made towards making such changes.

The city also wants changes to the rule that restricts voting rights for borrowing plebiscites only to people who pay property taxes.

That’s important to the city because it’s getting ready for a referendum on borrowing millions of dollars to pay for a new aquatics centre and other infrastructure, with a vote coming as early as this fall.

Hussey said the current law excludes people who live in social housing, staff or rental apartments from having a say.

“The vote is not representative of the population,” he said.

In 2006, ratepayers defeated by just 17 votes a ballot measure seeking permission to borrow $12 million for the construction of a new swimming pool. Just 267 people cast ballots in that plebiscite. They also defeated a proposal to borrow $6 million for a new city hall, but by a much wider margin.