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Municipalities in Yukon say residents outside the city get more than they pay in taxes

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Municipalities in the Yukon say it is time for people living outside their municipal boundaries to pay more taxes.

The Association of Yukon Communities (AYC) passed a resolution in 2023 calling on the territorial government to “review current property taxes in Yukon's outlying communities and increase those taxes accordingly.”

“This is a resolution proposal that comes up time and time again at the AYC,” said Dawson City Mayor Bill Kendrick, who introduced the resolution proposal.

“It's not an easy issue and nobody likes paying taxes and nobody likes seeing tax increases, but it's something that all governments and all people are grappling with.”

Kendrick says his city is struggling with ever-increasing costs to provide municipal services. The idea behind the solution is that people who live just outside municipal boundaries often benefit from those services without always paying their share.

“I think it’s common knowledge that taxes in the outlying areas are significantly lower than taxes within the communities,” Kendrick said.

“Many communities in the Yukon are concerned that people will want to move there, live a little outside of the city and pay less taxes. And communities continue to be burdened with snow removal to people's workplaces, providing recreational facilities and the cost of water treatment plants.”

Dawson City Council has passed a motion to amend a bylaw to allow microbreweries and distilleries to operate on the historic town site. Dawson City, Yukon, October 2021.Dawson City Council has passed a motion to amend a bylaw to allow microbreweries and distilleries to operate on the historic town site. Dawson City, Yukon, October 2021.

Dawson City Council has passed a motion to amend a bylaw to allow microbreweries and distilleries to operate on the historic town site. Dawson City, Yukon, October 2021.

Downtown Dawson City. (Chris MacIntyre/CBC)

AYC chair Ted Laking, who is also a Whitehorse city councillor, said it's not just about tax increases. He is proposing a change to how the territory funds municipalities, through the Comprehensive Municipal Grant.

“Municipalities are increasingly saying to the Yukon government, 'Look, we're happy to be able to provide services to all Yukoners, but it costs us money,'” Laking said.

“There are compelling reasons why we need to address this issue through our funding formula with the Yukon government to cover some of these costs.”

The Comprehensive Municipal Grant was created by the territorial government in 1991 to provide annual, unconditional funding to Yukon's eight municipalities to enable them to provide basic services to their citizens.

Grants in 2023 ranged from $1.4 million for Teslin to $8.5 million for Whitehorse. The territorial government announced in October that grants for municipalities will increase by 10 percent in 2024.

Minister “somewhat reluctant to raise taxes in this environment”

Richard Mostyn, Yukon's minister of municipal services, said raising taxes for residents outside municipal boundaries would require more explicit support from the AYC.

“I'm a little hesitant to raise taxes in this environment, but that's one of the proposals that the AYC has put before me and I'm just hoping for their support to get that passed. I'm going to need some letters of support and some work from the AYC to actually get that done,” Mostyn said.

Meanwhile, at least one resident of the district outside Dawson City is not enthusiastic about the idea.

Brent MacDonald lives across the river from the city in West Dawson and says he doesn't use any of the basic municipal services like sewer, water, garbage collection or snow removal.

“We are essentially not getting anything for free from the city of Dawson,” he said.

There are fees for all the services he uses in the city – such as filling up water or using the recreation center, MacDonald said.

“I guess the city is trying to create another or larger source of revenue, and I'm not sure why they're targeting property owners outside the boundaries,” he said.

“I mean, I'm not opposed to paying my fair share for life in the Yukon. But I haven't seen any rationale or data or evidence to suggest that this is the best or even reasonable way forward.”