Iqaluit council defers decision on property tax exemption for daycare
Tundra Buddies seeking $11,821 in relief; item to return to council in 2 weeks
City councillors moved to defer a decision whether to grant Tundra Buddies Daycare, pictured here, an exemption on its property tax. (Photo by Daron Letts)
Iqaluit city councillors are deferring a decision on whether to grant a property tax exemption to one of the city’s non-profit daycare providers, citing a need for more information regarding the organization’s occupancy of a federal property.
Tundra Buddies Daycare Society is asking for $11,821 in relief.
A 2022 bylaw sets aside $300,000 to provide relief to non-profit organizations on their property taxes. Currently, the city provides $123,283 of that money to various organizations, according to a request for decision city administration provided to councillors for Tuesday’s council meeting.
However, the daycare’s location led to questions from councillors Kyle Sheppard and Romeyn Stevenson.
“It’s a federal property that’s being leased to the daycare society,” Peter Tumilty, Iqaluit’s director of corporate and financial services, told councillors.
The federal government is exempt from paying local property taxes, according to Public Services and Procurements Canada. Instead, it makes payments in lieu of taxes to local governments.
However, when federal property is leased to a third-party occupant, it ceases to be considered as federal property.
“I’m not comfortable subsidizing the federal government and I just want some back-up, ensuring that this exemption — if we provide it — is directly benefitting the society itself,” said Sheppard.
“I want to ensure that we’ve, kind of, verified the structure of that lease — the fact that they do pay this amount to their landlord, who happens to be the federal government.”
Tumilty said the federal government does not pay the property tax.
“It’s on federal property, but it’s not exempt, so if [the property tax] has to be paid, the daycare would be the one paying the bill,” Tumilty said.
“That’s why we’re trying to, sort of, make it go away under this process.”
Sheppard said he would need a more “fulsome” request for decision on the matter. He moved a motion to have it deferred to the next meeting, scheduled for Nov. 26, so councillors can make a decision with more information.
No representatives from Tundra Buddies were present at Tuesday’s meeting. When reached by phone and email Wednesday morning, an employee from the daycare declined to comment.
Sheppard declined to speak to reporters after Tuesday’s meeting.
Stevenson told reporters that in two weeks, he hopes councillors can be presented more information.
“I don’t think there’s any issue with the city giving a tax exemption to a daycare,” Stevenson said in an interview, adding that that’s the purpose of the bylaw.
“The outcome that was being presented by staff makes perfect sense, but the method of getting there seems a bit strange.”
Apparently Sheppard has a problem listening to his Director of Corporate Services. Tumilty (who is reliable) told him directly, and to his face, that the daycare is responsible for the property tax. Apparently that’s not fulsome enough.
Do you know who else directly benefits the society in Iqaluit; Northmart, Narwhal, heck even Rannva. They provide either a service or goods that benefit the people of Iqaluit and beyond. The fact that if any of these companies are required to pay property taxes would be removed if we applied this logic.
Consider the difference between non-profit and for profit organizations.
Difference is that it’s a much easier to take advantage of funding provided to a non profit. It’s easy to skirt accountability. Nonprofits still generate money. If they have enough money to pay their property taxes they should pay them. It’s still a business. If they can’t show dire financial need then they shouldn’t get it. These organizations receive millions of dollars and all kinds of funding from various levels of government.
According to City bylaw 935, if the daycare just submitted an application, funding wouldn’t be available to them until the next fiscal. Rules are rules.
The members will need to cough up the funds and the board of directors and executive staff can explain how they overspent the money, that’s accountability. C’est la vie.