A crucial decision for Iqaluit

The last time Iqaluit’s ratepayers were asked to approve a borrowing proposal put to them by the municipality of Iqaluit, they said no, emphatically.

That vote, held in the mid-1990s, was to approve the borrowing of a mere $500,000 to pay for a small piece of road-paving. At that time, Iqaluit ratepayers simply did not trust the municipality’s ability to manage its finances well enough to handle the debt, and they voted against it by an overwhelming margin.

Who can blame them? It was around that time that the territorial government removed Iqaluit’s mayor, senior administrative officer and entire council for financial incompetence, and replaced them with an appointed administrator.

But that was then, and this is now.

On Sept. 11, Iqaluit’s municipal government, now a “city,” will ask ratepayers to approve the borrowing of $4 million, to pay for improvements to Iqaluit’s dilapidated water supply system.

It’s part of a five-year, $50 million package of badly-needed infrastructure upgrades that city council approved last year, which they will undertake between now and 2008. The package includes street-paving, water and sewer improvements, and some recreational facilities.

The Government of Nunavut will give the city $31 million over the next five years to help pay for all that work. But the GN’s deal is conditional on Iqaluit raising $19 million of its own. By dipping into its reserves, and raising taxes and municipal service fees, the city has found $15 million, but must borrow another $4 million.

Should Iqaluit ratepayers now approve this request when they cast their votes on Sept. 11?

Despite the many legitimate concerns that ratepayers may have about the city’s ability to manage such a debt, the answer must be yes.

The entire package of infrastructure improvements that the city has worked out over the past two years could come unravelled if they are not able to borrow the last $4 million.

Those improvements aren’t frivolous luxuries. They’re intended to support public services that are essential for public health and safety – such as water supply and treatment, sewage treatment and paved roads. Although Iqaluit’s rapid growth over the past five years has produced some economic benefits for some groups of people, in other ways the community has become almost unliveable for many residents. And that’s partly because of Iqaluit’s recent infrastructure crisis.

Any ratepayers who are leaning towards a no vote should consider all that before they cast their ballots.

After all, it’s understandable that some ratepayers will find it hard to trust the municipality of Iqaluit, with its long history of bungling and incompetence. For example, many people haven’t forgotten the $7 million sewage treatment plant fiasco.

To be fair, though, this is a different council than the one that presided over the sewage plant disaster. Many senior staff positions within the city’s administration are now held by new people. There’s no evidence that the city, with some prudent financial management, can’t service the debt over the next 15 years.

They have promised to provide ratepayers with the information they will need to make an informed decision. Ratepayers should hold the city to that promise, naturally, but city officials now appear to be so eager to get a positive outcome on Sept. 11, they’re likely to co-operate willingly with all such requests.

Another problem, of course, is the process. On Sept. 11, a relatively small group of residents will be asked to make a crucial decision that will affect the well-being of the entire population of Iqaluit, whether or not they are affluent enough to own property.

For the future, there has to be a better way of approving major municipal borrowing decisions. The city of Iqaluit is a 21st century institution hampered by a 19th century method of financing its operations. That’s a problem that Iqaluit shares with most other Canadian municipalities.

No matter how wealthy they may be, few municipalities in Canada are able to raise the revenues they need from property taxes alone, and must also depend on grants and other transfers from provincial and territorial governments. At the same time, the Liberal government’s highly touted Canada infrastructure program has simply failed to meet the infrastructure needs of small-population municipalities like Iqaluit.

If more senior levels of government were providing municipalities with the support they really need, Iqaluit wouldn’t have to beg its ratepayers for permission to borrow $4 million.

But that’s no reason to oppose the request. On Sept. 11, we urge ratepayers to support the city’s proposal – the benefits simply out-weight the potential risks. JB