The Yellowknife Chamber of Commerce called on the territory to scrap its proposed tax increase, ahead of further deliberations and voting on the draft 2021 budget.
The City of Yellowknife’s administration had initially said a tax increase of 11.92 per cent would be needed to run a balanced budget, which the city legally has to do.
But in a previous interview with MyYellowknifeNow.com, Yellowknife Mayor Rebecca Alty said the actual figure would be around a 4.26 per cent increase to taxes.
But an increase of that size would still harm a lot of businesses in the city, according to a statement from the Yellowknife Chamber of Commerce.
“The COVID-19 pandemic has been devastating for the Yellowknife business community and our 383 members. A property tax increase for 2021 will not be sustainable for many businesses who have been struggling throughout the past 8 months,” in a statement.
The tax increase was able to decrease because of funding from the territorial government, totalling $1.5 million in COVID-19 relief funding. Other measures suggested by city council were to change the schedule for maintenance on the city’s water mains and paving to alternating years, rather than having both happen every year.
This could save the city $7 million, according to city administration’s efforts. But both the city and the Yellowknife Chamber said this could create maintenance challenges down the line.
“Government infrastructure spending is an important economic driver, especially for local businesses who are typically awarded these contracts,” the Chamber said in a statement. “In addition, research has found that deferring infrastructure maintenance can result in significant cost increases in the future and reduce the infrastructure’s life cycle by as much as one-third.”
The YK Chamber also called for increased consultation with local businesses during budget deliberations in the future. They also recommend creating an external financial committee, that would report to city council with the aim of “exploring operational efficiencies and cost saving measures.”
Both Alty and several other city councillors emphasized when the tax increase was initially proposed, that the final tax increase would be less than the 11.92 per cent city administrators had proposed.
Alty added that increased revenues could help curtail the tax increase. With every $315,000 raised in revenues, it would correspond in a one per cent drop in the tax increase, she said.
“The Draft Budget 2021 document reflects an initial plan for ensuring that the core services and programs expected by residents and businesses are safely delivered, and that work progresses towards Council’s goals and objectives,” Alison Harrower, a city spokesperson, wrote in an email. The draft budget will be thoroughly reviewed by Council and Administration will address specific questions during budget deliberations, as Council works to finalize the plan
The Yellowknife Chamber of Commerce is holding a public meeting with the city on November 24 at 12 p.m. via Zoom.
Mayor and council will debate the draft budget between November 30 and December 3. The final approved budget is expected on December 7.