Rankin considers move to collect property taxes

JOHN THOMPSON

The hamlet of Rankin Inlet is contemplating becoming a town, a move that would allow its council to raise taxes.

The shift could produce between $2 to 3 million in additional revenue, but at a cost. Taxes paid by homeowners would increase substantially, between an estimated $600 to $900 annually.

John Hodgson, the hamlet’s senior administrative officer and a proponent of incorporating Rankin Inlet as a town, said the hamlet is just scraping by with the money it has while costs continue to rise to repair aging infrastructure, pay its staff and provide municipal services.

“I guess the basic difference is between prosperity and survival,” he said, referring to the choice of incorporating as a town or not.

“It seems every one of the services we offer, we’re at our limits.”

Currently, homeowners in Rankin Inlet — and in every other community in Nunavut, aside from Iqaluit — pay property taxes directly to the Government of Nunavut. In turn, each community other than the capital receives an operating grant from the GN.

But a report recently drafted by the GN suggests that Rankin Inlet, as Nunavut’s second-largest community, has enough homeowners to make the switch to becoming a town and raising taxes itself.

If residents in Rankin Inlet paid $1 million collectively in taxes, Hodgson estimates the GN would kick in another $1.5 in core funding, as well as new capital block funding. That means an extra $2 to 3 million available each year.

That report suggests following the example of the province of Prince Edward Island, where the provincial government handles the administration of collecting taxes for its smaller communities, while leaving the decision to increase or decrease taxes in local hands.

Rankin Inlet’s hamlet councillors had mixed feelings about the proposal, but at a recent meeting they did vote to go ahead with an in-depth study that will consider the consequences of upgrading the hamlet to a town. That study should be complete in about six months. Besides requiring the support of council, the plans would also be presented to the public, Hodgson said.

He acknowledged that increasing taxes is never popular — and introducing them in the first place will likely be even less so.

“I know it’s going to be a tough sell.”