Homeowners group in a huff about tax notices

A recently-formed Iqaluit homeowners group told Iqaluit city councillors last month that the city’s new four-times-a-year payment system for property taxes has taken them by surprise and they don’t like it.

“Why was the community not informed about this?” said Ed McKenna, a disgruntled homeowner who came to city council’s March 22 meeting to complain on behalf of the Iqaluit Homeowners’ Association about early property tax payment notices that recently appeared in ratepayers’ mailboxes.

“Many homeowners have contacted the board to say that they don’t understand this paper,” McKenna said while brandishing a copy of his own tax notice.

Under the new system, ratepayers are required to pay their annual tax bill in four installments, two in the spring, and two in the summer and fall. The recent notices say the first installment is due April 30, while the second is due May 30. The next two installments will be due later in the year.

Under the old system, ratepayers were billed in two installments, both of them due towards the end of the year.

Iqaluit mayor Elisapee Sheutiapik said council thought homeowners would like the new system, but she also said the new system could have been communicated better.

“It is evident that there was not enough consultation,” Sheutiapik said.

Coun. Theresa Rodrigue said the four-times-a-year installment system is used in municipalities throughout Canada, and that as a homeowner, she likes it.

“Instead of paying 100 per cent in the last quarter, it certainly helps the homeowner to spread it out over the whole year,” Rodrigue said.

Ian Fremantle, the city’s CAO, explained that for the first part of the year, the city has little operating cash and must use a line of credit at the bank to pay its bills. He said that last year, the city exceeded that line of credit, putting itself into an illegal position.

So to improve cash flow and reduce interest costs created by overdependence on the line of credit, Fremantle said the city is asking ratepayers to pay about half their tax bill within the first half of the year.

He said the city doesn’t actually know the exact amount of tax to charge each property owner until May of each year – that’s when the city receives a list called the “assessment roll” from the Government of Nunavut. The assessment roll lists each property in town, with the assessed value used for tax purposes.

This year, the city is basing the first two tax installment payments for each ratepayer on 50 per cent of the tax bill they paid last year, with the next two installments based on the exact information contained in the assessment roll. He said that’s a method used in many Canadian municipalities.

Property owners whose assessed value is unchanged this year should see little, if any, changes in the size of their total 2005 property tax bills.

That’s because the 2.5 mill tax increase for 2005 that council voted for last December is offset by the GN’s elimination last year of the 2.5 mill school tax.