City of Iqaluit to consider forgiving more than $340,000 in old debts
“These are truly, legally uncollectable debts at this point in time, there is no way we will ever get paid for this,” says Coun. Kyle Sheppard
The City of Iqaluit is considering a bylaw to forgive more than $340,000 in debts owed to the city before 2006.
Iqaluit’s chief administrative officer Amy Elgersma told the city’s finance committee Tuesday the debts are uncollectible because the city’s financial system crashed around 2005, leaving it without the needed documentation.
All of the debts in question are from unpaid fees. None is for property tax bills or lower base improvement fees, a city report states.
Coun. Kyle Sheppard, chair of the finance committee, said that given the age of the debts, they are past their statute of limitations.
“These are truly, legally uncollectible debts at this point in time. There is no way we will ever get paid for this,” he said.
“This debt needs to be written off.”
Alison Drummond, the city’s senior director of corporate services, said the proposed bylaw would give the city a better sense of what debts it’s able to collect.
“What I’m trying to do is show the auditor that we’re moving forward with some of these very old debts,” Drummond said.
According to a document provided to committee members, the debts are between 16 and 21 years old, with many belonging to now-deceased or former residents.
While some line items are as low as $20, there are several that exceed $10,000.
Among the biggest debtors are the Federation of Canadian Municipalities for amounts exceeding $52,390, the Government of Nunavut for amounts in excess of $44,000, the Baffin Regional Hospital for an amount exceeding $21,900 and Nunastar Properties for more than $14,350.
Although some of these accounts are still active with the city, Drummond said the debts can’t be paid because the city lacks documentation. She gave the example of the RCMP, which owes $13,801 for an arena rental.
“They were willing to pay it,” she said.
“There was absolutely no way that we could find the invoice or the documentation that would allow them to process payment.”
Drummond added that the majority of the debts face a similar issue.
Mayor Kenny Bell agreed the debts are uncollectible, but added that he doesn’t want to see the city forgiving future debts moving forward.
“I want to make it very clear that moving forward we want to collect taxes, we want to collect fees. We want to collect everything that’s owed to the city.”
In order to ensure similar debts don’t go uncollected in the future, after the city’s current finances are cleaned up, Sheppard said he’d like to add a formal collection policy to the next meeting’s agenda.
The next Iqaluit city council meeting is on Feb. 9.