Iqaluit moves closer to removing property tax exemption
New law should be in place for 2022, says committee chair
The City of Iqaluit is a step closer to taxing religious institutions, charities and non-profits after its finance committee voted unanimously Tuesday to recommend council change the property tax exemption bylaw.
If passed by council Sept. 14, city administration will develop the bylaw for council to vote to implement it in December or January, said finance committee chairperson Kyle Sheppard in an interview.
“By bringing in an application process, it would give a council committee the option to look individually at each application, ensure that the organization is active and providing the service to the community,” said the city’s senior director of corporate services, Alison Drummond, on Tuesday.
It’s the next step in a process that began in February, when councillors requested city staff to look into developing a policy the city could adopt to charge property tax to the 16 organizations that are currently exempt from paying.
Drummond said the city is giving up approximately $400,000 in property tax revenue from the exempt organizations — some of which aren’t in operation anymore.
If the proposed new policy is adopted, those organizations would have to go through an application process every few years that determines how much they will pay in property taxes.
There will be a full or partial exemption, with the partial exemptions split into two categories: 35- or 50-per-cent reductions.
To receive a partial tax exemption, the organizations will have to meet two of six requirements that determine what the building is used for, such as for childcare, religion or history or cultural purposes.
To continue to get a full tax exemption, the city will consider the organization’s services, if they fill holes in services that the city does not provide, or if they bring cultural and social value.
They will also have to show a financial need great enough that not having a tax exemption would be “detrimental to the delivery of their programs,” according to the draft policy.
Sheppard said the support will equal no more than 1.25 per cent of the city’s tax revenue and that the bylaw should be in effect for 2022.
In June, Mayor Kenny Bell tweeted he would move to amend the city’s exemption from property taxation bylaw shortly after news broke that the remains of 751 bodies, which are believed to be former students, had been located in unmarked graves at the former Marieval Indian Residential school in Saskatchewan.
He later backtracked, saying that a similar motion to the one he proposed had been passed in February, and that city staff were already developing a policy to change the property tax exemption bylaw.
During the finance committee meeting, he said that Iqaluit is the only municipality in Nunavut that offers such tax exemptions.
“Every other place in Nunavut is charged taxes,” he said.