Staff housing property lost in legal limbo; Nunavut Housing Corp. seeks tax relief
Housing corporation assumed ownership, but city says Métis corporation owes $336,271 tax bill
A dispute over a big property tax bill on a 21-unit staff housing property now controlled by the Nunavut Housing Corp. remains unresolved, following a meeting of the City of Iqaluit’s finance committee Sept. 18.
At the meeting, city councillors flatly refused to consider a request from the Nunavut Housing Corp. to forgive almost a third of the $336,271 in tax arrears owing on the property.
Although the housing corporation controls the property, it’s still listed on city tax records as being owned by the NWT Métis Development Corp. That’s because ownership of the lease for the land the buildings sit on has not been completely transferred to the NHC.
The property comprises three buildings on Apex Rd., just past a city water booster station.
“Mr. Chairman, I think they’re trying to take advantage of us,” city councillor Simon Nattaq told the committee chair, Coun. Romeyn Stevenson, at the Sept. 18 meeting.
Councillors concluded the Housing Corp’s request does not follow territorial law and procedures, and that the corporation was never properly listed as the owner of the lot and buildings.
The committee drafted a motion to refuse the request, which they passed unanimously.
The Housing Corp. told the city in January of 2012 that, contrary to the city’s tax records, the NWT Métis Development Corp. no longer owns the land, because their lease had expired.
The NWT Métis Development Corp. still appears to exist, but the company does not appear to have a website. Public registry information lists its address as 5125 50th Street in Yellowknife.
Normally, governments and government agencies don’t pay property tax on buildings they own on municipal land. Instead, they pay grants in lieu of taxes.
But private businesses that own property leased to government do pay property taxes.
In the case of the Métis corporation, it’s not clear when ownership of the building and responsibility for the lot lease transferred from the private company to the NHC.
The city first heard of a possible transfer of ownership of the property from Métis Development to the Housing Corp. in an email from an NHC lawyer in 2006, according to Jennifer Catarino, Iqaluit’s acting director of planning and development.
Records that show the Métis corporation’s lease on the land expired in 2007.
This, according to the NHC, means tax arrears on the property, unpaid by the Métis corporation, have fallen into their lap.
The accumulated arrears, which include years of compounded interest, amount to $336,271.83. That’s the third highest in the city’s list of about 60 property owners who owe tax arrears exceeding $500.
The NHC has asked the city to forgive an amount of $105,056 from the total.
That figure, according to the city’s lands administrator Amanda Wells, represents “penalties that were charged against the taxes.”
“Each month there’s a one per cent compounded interest,” Wells told the committee.
This interest on unpaid taxes accumulated over years, starting at some unknown time when the Métis corporation owned the building.
The NHC did their own calculation on how much of that figure represents the actual tax owing and how much represents interest penalties, Wells said.
The NHC also claims the city is at fault for not properly informing them of lease arrangements on the land.
The request, which Catarino presented to the committee for discussion, left councillors baffled.
Catarino pointed out that it contravened Nunavut’s Consolidation of Property Assessment and Taxation Act.
John Mabberi-Mudonyi, the city’s senior director of corporate services, agreed.
“We cannot go against the act,” he said.
Iqaluit’s property tax arrears totalled more than $2,323,000, as of July 11, 2013.
Only two properties owe more than the amount listed to the NWT Métis Development Corporation. Those two amounted to about $558,000 and $436,000, respectively.