Iqaluit tax delinquents get temporary reprieve

ODILE NELSON

Iqaluit’s three worst tax delinquents have gotten off on a technicality, after the city announced this week that a legal loophole has forced it to back off its tax arrears sale.

With only six days to go before the Sept. 15 auction, and one month before the upcoming municipal election, Mayor John Matthews announced during a council meeting on Aug. 9 that the city would have to cancel the auction.

“We received word from our lawyer that the Land Titles Office would not allow the tax sale to go ahead because the city did not issue the leases initially,” Matthews said in an interview after the meeting.

This past July, the City of Iqaluit published the names of the town’s 17 worst tax offenders and threatened to sell off their properties if they did not settle their outstanding accounts with the municipality.

Together, the 17 offenders owed $612,000 in unpaid property taxes, with the three worst, Jonah Kelly, Jetaloo Kakee and Akeeshoo Joamie, owing the municipality more than $250,000 in back taxes.

Since then, and despite much criticism, the city had pushed ahead with its threat to send the properties to the auction block – even going so far as issuing a list of procedures for the auction.

And, to a great extent, the threat worked. Property owners, worried that they could lose their homes or businesses, scrambled to pay the city in full or make long-term arrangements. Over the past month and a half, the city settled accounts with 13 property owners on the list, collecting more than $280,000 in the process.

Matthews confirmed that the three private residences with the biggest tax arrears still had outstanding accounts with the city.

But Matthews said the land titles office, which registers leases, lease transfers and mortgages in Nunavut, advised the city’s lawyer on Aug. 28 that the city could not enter these three properties into a tax arrears sale because their leases were first granted by the Government of Northwest Territories.

All Iqaluit properties are built on leased land and up until four years ago, most property owners leased that land from the GNWT. With the creation of Nunavut in 1999, many of these leases were transferred to GN. Other leases are granted directly by the City of Iqaluit.

The three property owners with the most outstanding debt are long-time Iqaluit residents and their leases are with the GNWT. This means the city does not have the right to proceed with a tax sale of the buildings because they exist on land leased by the territorial government.

But though the three homeowners have been given a reprieve, it is only temporary.

The city now plans to take Kelly, Akeeshoo and Kakee to court to retrieve the back taxes. The process could take several months but should end with the city recouping some of its money.

“We can go to the courts and request the right to sell the property through the sheriff,” Matthews said. “So it’s the sheriff who organizes it.”

The city has done this once before. In late 2001, it hired a Yellowknife lawyer to file motions against Sikkiniq Latrielle, Rick Bradley, Kakee, Kelly and Joamie. The court eventually agreed to let the sheriff sell Latrielle’s Apex residence.

The conclusions to the other motions could not be confirmed before Nunatsiaq News press-time.

As for the homeowners who went to great lengths to settle their accounts before the tax sale, Matthews said he was not worried about a backlash.

“Council hasn’t changed its position. Council is going forward and if the money isn’t paid to the city, council is going to proceed with that other avenue,” he said.

Matthews said it is his understanding that there is little chance the homeowners will be able to avoid paying up after the matter goes before the courts.

“This is just another way to proceed. Because the city is the first creditor, they have the first claim on the property. So if the debt is outstanding, then they can force the property to be sold to recover their debt,” he said.

Matthews admitted he was in some ways relieved the controversial action would not go through, giving the city and remaining homeowners one more chance to work out a mutually acceptable arrangement.

To that end, the city will hold a closed-door meeting next Monday with what Matthews called “interested stakeholders” to see if another solution can be found.

He expects territorial politicians, bureaucrats and members of NTI to attend. He could not say if the property owners themselves would be there.