City of Iqaluit warns of 6% property tax hike if Qulliq Energy plan is approved
City of Iqaluit facing 71.5% power rate hike on municipal buildings under QEC proposal
The City of Iqaluit is warning it will have to raise property taxes if the Qulliq Energy Corporation's general rate application is approved.
In a move to help ease the cost of living to Nunavummiut in smaller communities, the Qulliq Energy Corp. (QEC) has proposed to slash commercial electricity rates across the territory — except in Iqaluit — and hike government rates to make up the difference.
QEC needs to recover a $6.6 million shortfall with how electricity prices are set now. The proposal would establish a territory-wide rate rather than have rates vary by community, a structure which has been in place since before Nunavut split from the Northwest Territories.
Under the proposed changes, Iqaluit's commercial government power rates would increase by 71.5 per cent, for all three levels of government.
'Impact is so extreme'
Coun. Kyle Sheppard said the increase would cost the city $1.3 million dollars annually, requiring a 6 per cent hike to property taxes to make up the difference, though he said there's some flexibility in how a property tax hike is structured between homeowners, businesses and government.
"In reviewing the rate application, my first instinct is to think that it's actually a mistake because of how outrageous the impact is to the City of Iqaluit," Sheppard said.
Iqaluit homeowners and businesses are already facing a 5.1 per cent increase to their power bills under QEC's proposal — though those increases are moving forward regardless, even without the implementation of a territory-wide rate.
TL;DR: Electricity rates are going up to all residential customers in Nunavut by 5.1%, but only for subsidized usage.<br><br>It's when people go over those subsidy usage limits where communities are going to see substantially lower costs.<br><br>Here's a quick explainer video:<br><br>1/ <a href="https://t.co/aAtRKbAkiy">pic.twitter.com/aAtRKbAkiy</a>—@NickMurray91
"It's a noble goal, to be sure," Sheppard said on the plan to try and lower the cost of living in smaller communities.
"There needs be a way to mitigate that impact on the City of Iqaluit. The municipality is probably the second-largest energy consumer in the city, outside the Government of Nunavut. And that impact is so extreme on us."
In 2021, the City of Iqaluit paid $2.3 million in power bills, though not all City of Iqaluit buildings are billed at QEC's commercial government rate.
"There needs to be some sort of subsidy mechanism or some way to offset that cost, through increased contributions from the Government of Nunavut to the City of Iqaluit," Sheppard said. "Or exclude the city entirely from this."
QEC acknowledged that the City of Iqaluit would "be greatly affected" by the proposal, because Iqaluit is the "only community which obtains the majority of its operating costs through community tax revenue rather than receiving operating costs from the GN," a QEC spokesperson said, adding they've reached out to the City of Iqaluit for a meeting.
Sheppard said Iqaluit Mayor Kenny Bell will be presenting to the Utility Rates Review Council — which makes recommendations to the minister, who has the final say.
"This highlights the importance of submitting feedback to URRC during the review process," QEC said.
The Utility Rates Review Council is now in the process of reviewing public feedback to provide advice to the minister on the proposed changes. Nunavummiut can weigh in by emailing their comments to URRC@gov.nu.ca by on June 17.