The city is reviewing its mill rate tax ratio, which decides how much of the city’s taxes property owners pay on different kinds of property.
Director of Corporate Services Sharolynn Woodward says that while the decision is normally based on math, changing the mill rate allows city council to demonstrate its political priorities, she told councillors during a governance and priorities committee meeting on Monday.
City administration presented councillors with a number of scenarios, primarily involving tax cuts for non-residential properties, like commercial and industrial, while increasing the mill rate ratio correspondingly for residential properties
The current mill rate ratio is set at 1:2.26, meaning for every dollar a residential property owner pays, a non-residential property owner pays $2.26. Proposals included changing the ratio to 1:2.13 or 1:1.83 which would see residential property owners have to pay more of the town’s tax bill.
Woodward noted that the council had already passed a budget which proposed a 2.5 per cent tax increase. Changing the mill rate would alter resident’s tax bills more than they are expecting.
Councillor Niels Konge said businesses shoulder too much of the city’s tax burden.
This means while only just over a third of properties are non-residential, commercial and industrial property owners pay 58.17 per cent of taxes. Whereas residential property makes up more than 61 per cent of the taxable property in Yellowknife, but residential property owners pay 41.8 per cent of the city’s tax bill.
Woodward noted previous adjustments in the mill rate had been made to keep the non-residential property owners paying the same percentage of the city’s tax revenue.
Councillor Julian Morse said the mill rate should be split into categories, allowing small businesses to be given tax reductions.
But changing the mill rate won’t necessarily incentivize businesses, according to Mayor Rebecca Alty, who was in favour of keeping the mill rate the same. Alty added council should create business incentive programs instead.
Councillors Rommel Silverio, Robin Williams and Stacie Smith all supported keeping mill rates the same as in 2020.
Councillor Cynthia Mufandaedza said she would support changing the mill rate to a 1:2.13 ratio, because it would gradually increase taxes for residential property owners. That could be something that the city could build on in years to come, she added.
City council will discuss the issue further at their next meeting on April 12.
