City publishes annual list of tax offenders

Hopes public pressure will encourage people to pay up

By JOHN BIRD

Iqaluit has billed nearly $7.5 million in property taxes in 2009.

But it also has unpaid tax bills on its books of close to $1.5 million — equivalent to nearly 20 per cent of the tax revenue the city needs for the year.

Those unpaid taxes create an unjust situation for the vast majority of people who pay up on time, said John Mabberi-Mudonyi,
the city’s director of finance.

“If you pay your taxes and I don’t, and yet we are both getting the same services, how is that fair?” he demanded.

They also make it difficult for Iqaluit to operate properly.

“How can the city function and deliver services effectively if people aren’t paying their taxes?”

Back in 2003, facing a similar situation, the city attempted to seize and sell nine properties for unpaid back taxes, Iqaluit’s Chief Administration Officer John Hussey told Nunatsiaq News.

But the Nunavut government blocked that move at the last moment because it contravened territorial legislation left over from the NWT regime.

Resulting public pressure on the miscreants did lead some to pay their outstanding taxes, Hussey said, although the worst offenders are still outstanding.

At that time, also due to public pressure, the city also halved the interest rate it was charging on overdue taxes, cutting it from 24 per cent a year to 12 per cent.

This summer, Iqaluit once again resorted to desperate measures to collect on its tax arrears. It published a list of the names of the property owners — individuals and corporations — who owe more than $500 in back taxes each.

The list, which appeared in the July 17 Nunatsiaq News, contains 56 names. Altogether the people on it owe $1,496,895.

But when you get right down to it, only five names seem to account for more than three-fifths of all those tax arrears. Their unpaid tax bills amount to over $907,000.

The big five, and the taxes they owe, are:

  • Jonah and Lizzie Kelly — $339,860;
  • Jetaloo Kakee — $289,700;
  • NWT Métis Development Corp. — $102,930;
  • Akeshoo and Alicee Joamie — $91,015; and
  • Katujjijiit Development Corp. — $83,770.

There’s not much more than that the city can do if people still refuse to pay, Hussey admitted.

“But if we don’t get that money in our bank account, it affects our cash flow and we end up with a short fall.” The only options then are to reduce services or to raise tax rates for everyone.

He added that whenever those delinquent properties are sold, or go into estate dissolution when the owners die, the city will have first dibs on the dollars owing it, which continue to accrue interest — at that 12 per cent a year.

“If we don’t get the money today, we’ll get it later,” he said. “But meanwhile we still have the cash flow shortfall.”

There can be many reasons for taxes going unpaid for lengthy periods, including money tied up in estates after a death or as the result of an ongoing, contentious marriage dissolution.

In the case of the $103,000 the city says the NWT Métis Development Corp. owes in back cases, the corporation, based in Yellowknife, denies owing the money, saying it turned the property over to Nunavut Housing Corp., and the debt is theirs.

Nunavut Housing was unable to either verify or contradict that statement at short notice, but said it would look into the matter.

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