Iqaluit business leaders warn of higher costs from proposed tax increase

Members of Iqaluit’s business community are warning of higher costs if the city’s proposed property taxation rate bylaw is approved.

The new rates, proposed in response to the Government of Nunavut’s 2024 property value assessment, received narrow backing from city council on first and second readings at its Jan. 28 meeting when Mayor Solomon Awa voted to break a 3-3 vote split.

Councillors are set to consider the bylaw Tuesday evening for a third and final reading.

If passed, the bylaw would result in an average three per cent increase in property taxes for residential properties and 10 per cent increases for commercial and mixed-use properties.

“We’re thinking that the city council, instead of passing the bylaw, should refer back to the administration for further analysis and study and come up with a plan that would see more equitable distribution of taxes,” said Ed Romanowski, president of Nunastar Properties Inc., in an interview.

Romanowski, whose company owns Astro Hill, and Baffin Regional Chamber of Commerce president Steve Sullivan are scheduled to speak at city council Tuesday on the proposed bylaw.

Both men highlighted a number of costs they said would increase if the proposed tax rate goes through, including rent and products purchased from businesses.

In addition to higher business costs, Romanowski warned that renters living in mixed-use buildings could see their living costs go up higher than those living in strictly residential properties.

“Most of the properties that we’re developing now and in the future are mixed-use and encouraged to be mixed-use by the city as general policy,” he said.

“You shouldn’t then be penalizing or treating citizens in mixed-use projects any differently than somebody that’s in a non-mixed-use project.”

Sullivan also raised concerns about the increase in taxes for industrial properties. Those properties would not see a change in mill rate, according to the current proposed bylaw.

Peter Tumilty, the city’s director of finance, told councillors Jan. 28 that the increase for those properties would be 13.37 per cent.

The proposed mill rates — which are multiplied by a property’s assessed value to calculate the owner’s municipal property tax bill — were determined following the Government of Nunavut’s 2024 property value assessment, Tumilty told councillors last month.

The GN is responsible for assessing the values of properties every 10 years.

Sullivan also noted that commercial water rates increased last year to 3.5 cents per litre, from the previous two cents per litre.

“There’s going to be a finite limit to everybody as to what businesses can burden, especially the small and medium businesses which are so prevalent in Nunavut,” Sullivan said.

People were caught off guard by the latest notices of assessment, he said.

The city began mailing out notices of assessment Jan. 31, according to a Feb. 3 news release.

Romanowski said he hasn’t seen Nunastar’s assessments yet.

Both Romanowski and Sullivan spoke of the importance of the city working with businesses and those who would be affected by property tax increases.

The need for dialogue was Sullivan’s main point, adding he’s thankful council is giving him the opportunity to speak Tuesday.

“I think going forward we need to address this on a more timely basis as a collective — homeowners, businesses, the city council,” Sullivan said.

“Hopefully, we can make this work for everybody and encourage more business in Iqaluit and in the Baffin region, and not hinder business.”