Every day about 26 tonnes of garbage are trucked into Iqaluit’s landfill, already well over capacity.

Just down the road, the sewage treatment plant releases effluent into Koojesse Inlet.

Federal officials say that waste poses a danger to people and the environment.

Water tests last year in Frobisher Bay showed elevated levels of ammonia and toxic metals are making their way into the ocean.

Now Aboriginal Affairs and Northern Development Canada won't grant Iqaluit a new water licence until it cleans up it's landfill.

"Currently we're polluting our waters at a pretty... scary rate,” says councillor Kenny Bell.

The city’s current water license expired in July of 2012.

City council could face fines or even jail time if they don’t clean up the mess.

“No one likes to talk about trash,” says Bell. “We need to. We’re way past due. Just like many projects in the city, we’re under the gun."

One way to get rid of solid waste could be incineration, which Bell says has been on the agenda for years.

Incinerator could cost $4 million

Jean Lucas is with the company  Eco Waste Solutions.

In a presentation to council Tuesday night, she said incineration makes sense.

“Iqaluit is still a small population. It still has a relatively small amount of waste,” Lucas said.

“It doesn't make sense to build a huge waste energy plant. It doesn't make sense to have a very complex, experimental system. It makes sense to burn the waste in the cleanest way possible."

Eco Waste Solutions already has 10 facilities in Nunavut and the Northwest Territories.

The company says a top-of-the-line environmentally-friendly incinerator with air pollution control could cost up to $4 million.

Whether or not councillors were sold on the idea, they’ll have to come up with a decision soon, or face penalties.