We recommend that the City of Yellowknife:
- Formally adopt a budget policy that ensures mill rate ratios can only be changed after consultation with stakeholders and ensure consultations on mill rates happen at the same time as budget consultations;
- Explore opportunities to reduce the tax burden on small businesses, including the creation of a new small business mill rate class;
- Develop and communicate a plan to deploy the $10 million in reserve funds;
- Lobby the Government of the Northwest Territories to rectify the ongoing municipal funding gap and provide the $11 million in funding that the City is entitled to; and
- Establish an external Finance Committee, which would report to Council with the goal of exploring operational efficiencies and cost saving measures.
2022 Budget Submission
The Yellowknife Chamber of Commerce takes pride in the positive relationship and successful partnerships that it has developed with the City of Yellowknife. It is in this spirit that we bring forward our comments on the City of Yellowknife’s 2022 draft budget.
We would like to start off by acknowledging the reality of the last twelve months wherein COVID-19 has had a significant and pro-longed impact on city operations. We recognize that the closure of facilities in May 2021 and again in September and October impacted the City’s fiscal position reducing revenues from user fees. We acknowledge this is the context in which the Budget 2022 was prepared and support the approach of developing conservative revenue projections and limited expenditures where feasible. Specifically, we support the City’s goal to embrace opportunities to drive strategic land development and support growth opportunities with the objective of promoting development.
As Council prepares to debate the 2022 budget with a proposed 13.44% property tax increase, we urge Council to recognize that the COVID-19 pandemic has been devastating for the Yellowknife business community and our members. A property tax increase for 2022 will not be sustainable for many businesses who have been struggling throughout the past 18 months.
Our members are concerned because more of our community’s tax burden has been gradually, but continuously, placed on Yellowknife businesses. Businesses are interested in more opportunities to engage with Council to discuss how the tax burden is shared between property classes and are seeking greater clarity on how property tax increases will impact them. In keeping with our comments on the 2021 budget, we recommend that the City of Yellowknife formally adopt a budget policy that ensures mill rate ratios can only be changed after consultation with stakeholders, that consultations on mill rates happen at the same time as budget consultations, and that information about the property tax implications for each mill rate class is included in budget communications.
In our submission on the 2021 budget, we spoke to reserve funds and our desire for the City of Yellowknife to outline a plan to deploy these funds as soon as possible. This remains an important advocacy concern for the Chamber. The City of Yellowknife has $10.141 million in reserve funds, including $877,000 in the Downtown Development Reserve and $2.416 million in the Revitalization Initiative Reserve. As originally recommended in our April 9, 2020 and November 19, 2020 submissions to Council, we ask that the City of Yellowknife outline a plan to deploy these funds as soon as possible.
We urge the City to continue in its efforts to lobby the Government of the Northwest Territories to rectify the ongoing municipal funding gap and provide the $11 million in funding that the City is entitled to. You have the full support of the Yellowknife business community, and we are pleased to offer our continued support for the development of a plan to close this gap and address the very real impact of this perennial under-funding.
In closing, we re-iterate our recommendation from November 2021 that the City of Yellowknife establish an external Finance Committee, which would report to Council with a goal of exploring operational efficiencies and cost saving measures. We feel this is especially pressing given the potency of COVID 19’s economic impact on our community, planned increases on infrastructure spending and significant increases in city staffing.
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