Iqaluit opts for “careful” budget in 2010

Iqaluit city council passed its 2011 budget with a modest property tax hike offsetting a $400,000 cut in funding from the territorial government.

Councillors voted unanimously in favour of the budget during the March 8 council meeting, following a weekend-long line-by-line examination of the 100-page budget document.

“I think it’s a careful budget,” said Coun. Romeyn Stevenson, chair of the city’s finance committee. “We haven’t gone out of our way to spend a lot of money on things that are new, but we are making sure the services we have keep going.”

Property taxes will rise for residential, commercial and institutional property owners: by 25 cents per thousand dollars of assessed value on homes and $1.75 per thousand dollars on commercial, government and institutional property.

That amounts to an annual increase of $105 to $150 for a home worth $300,000. For other types of properties worth $300,000 the increase amounts to $15 to $240.

Stevenson said the city had to raises taxes to avoid service cuts.

Iqaluit lost $400,000 in operating funds from the Government of Nunavut on the grounds that oil and power prices dropped last year.

But Kathleen Lausmann, deputy minister of Community and Government Services, said the $400,000 decline came from the end of Government of Nunavut funding to municipalities designed to offset the last major spike in fuel costs, when oil prices skyrocketed in 2008.

That one-time program provided Iqaluit with $700,000 in annual funding, so Lausmann said the city is actually $300,000 to the good.

“It depends on how you want to tell the story,” she said in an interview.

But while global fuel prices lagged last year, they’ve been on the rise again recently, driven by concern over a series of political uprisings in the Arab world, particularly in oil-producing Libya.

And the Qulliq Energy Corporation is seeking permission from the Utility Rates Review Council to jack up power rates 19.3 per cent. A decision on that request is expected soon.

That has Mayor Madeleine Redfern seeking clarification from Community and Government Services minister Lorne Kusugak.

Power rates went up six per cent last year, and the city is budgeting for another six per cent increase this year.

City costs also went up now that the Arctic Winter Games arena is functioning again. That drove up city costs for electricity and staffing, Stevenson said.

The city’s total budget clocks in at $36 million, including $14 million in capital expenditures.

Major capital costs this year include $2.5 million to finish paving city streets and repair existing paved roads, $1 million to improve water management at the landfill, $450,000 for the design of a new solid waste facility and $100,000 for construction of the Road To Nowhere cemetery.

The budget also cuts the subsidy on residential water rates, meaning water will cost property owners two per cent more this year.

“(The) city is very slowly reducing the water subsidy so that residents aren’t faced with a full removal which would be unreasonable,” Redfern said in a Twitter message.