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IDEA seeks advice on repatriating Iqaluit school tax

"Why should we pay it if we don't get the money?"

PATRICIA D'SOUZA

The Iqaluit District Education Authority is seeking legal advice to recover the $2.5 million in school taxes it estimates the City of Iqaluit has collected on behalf of the Government of Nunavut since April 1999.

Members of the IDEA decided during their Dec. 1 meeting to seek out a policy or taxation specialist to pursue the more than $600,000 a year that is collected under the guise of a "school tax" but that actually ends up in the GN's general revenue account.

"It puts our collectors at the department of education on notice that we're not asleep at the wheel. We haven't fallen off the dump truck," said Sean Maloney, one of the IDEA members heading up the legal challenge.

The move follows years of unsuccessful appeals by the IDEA to claim the funds.

In a letter to Elisapee Sheutiapik, the mayor of Iqaluit, this past October, Kathy Smith, the former chair of the IDEA, pointed to a section of the Nunavut Education Act that supports the IDEA's position.

"136. (2) A municipal taxing authority under the Property Assessment and Taxation Act shall pay those property taxes collected by the municipal taxing authority that are attributable to the levy of the education mill rate under the Property Assessment and Taxation Act to an education body, where the property taxes have been collected pursuant to a request made by the education body."

That means, essentially, that according to the Education Act, the City of Iqaluit must pay the money it collects as a school tax to the body responsible for education in Iqaluit - the IDEA.

Furthermore, Smith says the act gives the IDEA the power to set the education mill rate in Iqaluit, and to raise it if necessary.

"We can increase the mill rate if our needs have grown. Why would that be in there if we weren't meant to get the money?" she said during the Monday night meeting.

Tim Neily, another IDEA member, took the debate one step further by suggesting the IDEA do away with the school tax altogether if the money isn't going to Iqaluit schools.

"We can also set it [the mill rate] to zero. Why should we pay it if we don't get the money?" he said.

Several IDEA members supported his suggestion.

"I'm sure our ratepayers will vote for it," Smith said.

"As I understand it, the funding that we collect is supplementary [to the funding we receive from the GN]," said Maloney. "If it doesn't go to the schools, does the territory write a cheque to the ratepayers?"

The City of Iqaluit has not responded to the IDEA's letter, but in a memo to the mayor and city council, John Hussey, the city's director of finance, said that school taxes collected in Iqaluit are turned over to the GN along with all other tax revenues.

He added that Iqaluit is not the only community to collect a school tax. "The school and property tax levied for 2002-2003 throughout Nunavut totaled $2.8 million, and the Government of Nunavut provided $90 million for school operations."

Hussey did not return phone calls this week, and has yet to follow through on the IDEA's request for the total value of the school tax for the five years since the creation of Nunavut.

But Smith contends Iqaluit is the only Nunavut community to collect the school tax as a separate line item. Iqaluit ratepayers pay a fee called "school tax" that is separate from property tax. But she says property owners in hamlets across the territory don't pay a separate amount to the schools in their communities when they pay their property tax bills to the GN.

The IDEA believes the potential payoff to Iqaluit schools is worth the money it will cost to hire an expert.

"An influx of over $600,000 [a year] into our school budgets would go a long way toward easing some of the pains experienced by years of cutbacks. Immediately we see the potential to hire more classroom support assistants and special needs assistants so desperately needed in our schools," Smith said in an October letter to Manitok Thompson, the minister of education.

In response to Smith's letter, Peter Geikie, the assistant deputy minister of education, confirmed that the GN collects $2.8 million in school tax on behalf of Nunavut communities. And he referred all further discussion to the taxation division of the GN's department of finance.

Bob Vardy, deputy minister of finance, said there is no mechanism within the GN to transmit the funds to the IDEA. He said all communities do indeed pay a school tax, and in fact, Iqaluit gets a break because it has a lower mill rate.

"There's an adjustment in the mill rate that we made back in '99, I guess we carried over the same mill rates that the GNWT was using, and it's lower in Iqaluit than in other areas, I guess to make some allowance for higher property values," he said.

"They get paid that amount of money, plus many times over what comes in. The amount of tax collected is just three per cent of the total spent. It's not an Iqaluit school tax, it's a Nunavut school tax."

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