The Mayor's Corner

September 7, 2001

A modest proposal

Little help for disabled Inuit.

JOHN MATTHEWS
Mayor of Iqaluit

As a child, I recall reading headlines in our local paper proclaiming increases in our city's mill rate. I asked my parents to explain the term to me, but was never really satisfied with their answer. It was not until I studied the concept at the university level that I fully understood the term.

I will now try to define the term and explain the context in which the city decided to increase Iqaluit's mill rate.

Every property in the city is assigned a value according to a complex formula. That value is expressed in two parts: land and improvements. Certified appraisers are contracted by the government of Nunavut to visually inspect all properties and place a value on the land and the building situated on that piece of land. Those values are then known as the "assessed values."

The mill is a rate applied to the assessed value of a property to calculate the property taxes due on that property. The mill rate is expressed in terms of thousands. In other words, a mill rate of 30 means that for every $1,000 of assessed value of a property, the rate payer must pay $30 to the municipality.

For example, if the assessed value of a property is $30,000 for land and $50,000 for the improvements (building), then that total of $80,000 will be divided by $1,000 to yield 80. Given the city's new mill rate of 29.55, the property tax payable to the city will be $2,364 (80 x 29.55). (The actual mill rate in Iqaluit will be increased by 2.5 mills to include the education tax collected by the city for the government of Nunavut).

Between 1990 and 2000, residential mill rates varied from a low of 25.4 in 1990 to a high of 32.27 in 1996. The mill rate of 29.55 for the year 2001 is lower than rates charged in five of the past 10 years. This increase of 2 mills will generate additional revenue to the city worth $350,000, while costing the average residential ratepayer an additional $200.

Council decided to increase the rate for two compelling financial reasons. First, the city needs money to implement its many projects. These projects include replacement of aging utilidor pipes, road-paving, upgrades to the water treatment plant and the most expensive item — a new solid waste disposal site.

Second, and probably most important, we must demonstrate our committment to resolving our financial problems. When the city approaches senior levels of governments for assistance, territorial and federal representatives ask us what we are contributing towards these projects.

With this modest increase in taxes, the city can show that we are indeed contributing, and that we expect financial assistance from the territorial and federal governments.

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