This is page numbers 4571 - 4620 of the Hansard for the 18th Assembly, 3rd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was yellowknife.

Topics

Poverty in the Northwest Territories
Members' Statements

Page 4578

The Speaker Jackson Lafferty

Masi. Members' statements. Member for Tu Nedhe-Wiilideh.

Early Childhood Development
Members' Statements

Page 4579

Tom Beaulieu Tu Nedhe-Wiilideh

Marsi, cho, Mr. Speaker. Mr. Speaker, today I will speak on the need to increase spending in early childhood development. Addressing this issue must be a solid joint effort on the part of our government.

Mr. Speaker, I will begin with the work needed in prenatal care. It is essential that we provide as much support as possible to women who are at risk of consuming alcohol while pregnant, because our territory depends on it. I believe the difference in the government spending between a person with FASD and a person without this disorder is over $1 million.

Mr. Speaker, we must invest in daycares across the NWT. Early childhood spending for children who are one, two, and three years old have huge returns. I believe the return on social spending is near a ratio of seven to one. In other words, Mr. Speaker, for every dollar spent in this area, the government will save $7 on things like social housing, income support, and increased graduation rates.

Mr. Speaker, if children are given the right supports, it would make them excel in their earlier years in school. It increases their chances of graduating from high school, which is the first big benchmark in education. Students who achieve grade 12 have a much higher chance of getting a job than a person who does not achieve grade 12. In fact, it's about 25 percent higher. It also gives that student an ability to go onto post-secondary education if they wish, which again is another important benchmark.

Mr. Speaker, students who have post-secondary education in the NWT can almost write their own ticket on the type of job they want. In fact, students with post-secondary education have about a 20 percent better chance of getting a job than a grade 12 graduate.

Mr. Speaker, it has been mentioned in this House many times that a job is the best social program. It reduces social spending on families with jobs, and I believe a salary paid is a return of $2.50 to every dollar paid to the employee. Thank you, Mr. Speaker.

Early Childhood Development
Members' Statements

Page 4579

The Speaker Jackson Lafferty

Masi. Members' statements. Item 4, reports of standing and special committees. Member for Kam Lake.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

October 30th, 2018

Page 4579

Kieron Testart Kam Lake

Thank you, Mr. Speaker. Mr. Speaker, your Standing Committee on Government Operations is pleased to provide its Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act, and commends it to the House.

Introduction

Bill 18, sponsored by the Department of Municipal and Community Affairs (MACA), amends the Cities, Towns and Villages (CTV) Act to provide municipal councils governed under the act with new powers: the authority to impose a tax on tourist accommodations; and the authority to allow property owners to finance energy efficiency or renewable energy works through local improvement charges added to the property owner's municipal tax bill. It is important to note that these new powers are separate from one another and not related, except that they are both dealt with under the Cities, Towns and Villages Act, the legislation that sets out the powers of tax-based municipal governments.

Bill 18 received second reading in the Legislative Assembly on May 29, 2018, and was referred to the Standing Committee on Government Operations ("the committee") for review.

The standing committee is pleased to report on its review of Bill 18: An Act to Amend the Cities, Towns and Villages Act.

Background

The Cities, Towns and Villages Act governs the tax-based municipalities of Yellowknife, Norman Wells, Fort Smith, Inuvik, Hay River, and Fort Simpson in the Northwest Territories. The amendments proposed to the CTV Act under Bill 18 would provide these municipalities with two new areas of authority that municipalities could choose to exercise at their discretion.

Tourist Accommodation Tax

As drafted, Bill 18 provides tax-based municipalities with the authority to pass a bylaw imposing a tourist accommodation tax, not exceeding 4 percent of the daily accommodation rate on anyone who offers accommodation in return for money within the municipal boundaries.

The bill prohibits the tax from being imposed on the following persons and classes of accommodation: accommodation paid for more than 30 continuous days; accommodation where the rate is less than $20 per night; accommodation where the subject of the tax is the Government of the Northwest Territories or its public boards and agencies; any person or family member being accommodated as a result of medical travel; anyone paying for a stay at a hospital or healthcare facility; or any other class of persons or bodies set out in the regulations. Collectively, these exemptions are referred to as "exclusions" in the act's marginal notes.

The bill also sets out other matters a municipality may include it its bylaw. This includes further exemptions and rebates from the tax; penalties for failure to comply; interest on outstanding payments; audit and inspection powers; dispute resolution mechanisms; enforcement; and any other matters council considers important. It also provides that municipalities may go to court to attempt to recover unpaid amounts.

The bill authorizes municipal councils to enter into revenue-sharing agreements with not-for-profit organizations for promoting tourism, and with persons and bodies for the collection and administration of tourist accommodation taxes. It also requires that tax revenue be used only for supporting tourism initiatives, such as the provision of visitor services and the promotion of the community and the NWT as a tourism destination.

Finally, Bill 18 proposes to enhance the Minister's regulation-making authority:

  • Governing the collection of a tourist accommodation tax;
  • Prescribing conditions and limits on that tax;
  • Prescribing persons and classes of accommodations that are exempt from the tax;
  • Respecting agreements between the municipality and hotel operators regarding the collection of taxes; and
  • Respecting the sharing of revenue with not-for-profit organizations.

Energy Upgrades and Retrofits through Local Improvement Bylaws

Currently, the CTV Act allows municipalities to make upgrades or improvements to groups of properties adjacent to one another, and to charge the owners of these properties for the cost of the work on their property tax bills.

These types of upgrades, referred to as "local improvements," tend to be new or replacement construction projects intended to upgrade or improve certain conditions within residential, commercial, and industrial areas of the municipality. Examples include street paving, driveway crossings, sidewalk replacement, lane paving, curb and gutter replacement, boulevards and street lighting, and extending sanitary, storm or water systems. Subject to local bylaws, the participation of property owners in these types of standard local improvements may be mandatory.

Bill 18 proposes to give tax-based municipalities the authority, by bylaw, to enable individual owners of private property to improve the energy efficiency of their homes or businesses and use the "local improvement charge" mechanism to pay off the cost of the energy installation over time.

This would allow interested private property owners to undertake energy efficiency or renewable energy retrofits or improvements without having to pay the costs upfront. Instead, they could have the municipality add the costs to their property tax bill to be paid off over time.

The most important difference between the standard type of local improvements tax-based municipalities already have the authority to undertake, and this new type of local improvement, is that the latter is completely voluntary on the part of a private property owner. A municipality must have the written consent of the property owner in order to authorize a levy against their property tax bill.

Bill 18 sets out the administrative process for how this new type of local improvement can be put into effect, including rules for how the energy efficiency or renewable energy work must be described, how costs must be determined, the requirement for the passing of bylaws to charge a levy against a private property, and for determining the period over which the costs will be repaid.

In addition, Bill 18 includes provisions:

  • Specifying that costs may include reasonable engineering expenses and administrative costs, and interests on borrowing;
  • Requiring that a municipality give public notice of its intent to pass a bylaw and sets out the required contents of that notice;
  • Requiring that a municipality pass a second bylaw once energy retrofit is completed, to levy a local improvement charge against a property;
  • Requiring full cost recovery for each project financed through a local improvement charge;
  • Allowing the municipality to streamline the administrative process for passing these bylaws by allowing the bylaw to authorize a specific or series of energy efficiency or renewable energy works or any works that satisfy the requirements of a program of the municipality; and
  • Require reporting by municipalities to the Minister.

Mr. Speaker, I will now ask the honourable Member for Hay River North to continue reading of the Report. Thank you, Mr. Speaker.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

Page 4581

The Speaker Jackson Lafferty

Member for Hay River North.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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R.J. Simpson Hay River North

Thank you, Mr. Speaker.

The Public Review of Bill 18

To commence consultation on Bill 18, the standing committee invited input on the bill from 99 local hotel and bed and breakfast (B&B) operators offering tourist accommodations in the six tax-based municipalities. This consultation list was kindly provided by the Department of Municipal and Community Affairs, who used the same list when consulting on the development of the bill. The committee also sent letters seeking input from the six impacted municipal councils.

Committee held a public hearing on Bill 18 in Yellowknife on September 19, 2018. At that hearing, committee heard a presentation from the Yellowknife Chamber of Commerce, provided by Mr. Kyle Thomas, Vice President. Committee also received a presentation from the City of Yellowknife, represented by Mr. Mark Heyck, Mayor; Ms. Sheila Bassi-Kellett, City Administrator; and Ms. Kerry Penney, Director of Policy, Communications and Economic Development. Committee noted that Ms. Shauna Morgan and Mr. Julian Morse, both councillors with the City of Yellowknife, were also in attendance in the audience. Finally, committee received a presentation from Mr. Karl H. Schaefers and Mr. Dan Dupuis, representing Mr. Ed Romanowski, president and chief operating officer of the Explorer Hotel. Committee thanks everyone who appeared before the committee and provided input on Bill 18 that evening.

Because of planned consultation travel on Bills 8 and 20, committee had already made arrangements to travel to three of the six tax-based municipalities. Hence, committee extended invitations to the municipal councils in these communities to discuss Bill 18. A meeting scheduled with the town of Hay River in mid-August was, unfortunately, cancelled due to unforeseen circumstances. However, on October 2, 2018, committee had the opportunity to meet with Mr. Jim McDonald, mayor of Inuvik; Mr. Joe Lavoie, assistant deputy mayor; and Ms. Natasha Kulikowski and Mr. Clarence Wood, both councillors. Committee thanks these Town of Inuvik representatives for their time and input.

Finally, committee received written submissions from the following:

  • The Explorer Hotel;
  • The Town of Fort Smith;
  • The Yellowknife Chamber of Commerce;
  • The City of Yellowknife;
  • Days Inn and Suites, Yellowknife; and
  • Embleton House Bed and Breakfast.

The committee takes this opportunity to thank everyone who provided written submissions. Copies of these submissions are appended to this report.

What We Heard

Overall, committee heard mixed support for Bill 18. Outside of Yellowknife, it is largely seen as a "Yellowknife" bill. Both Inuvik and Fort Smith expressed the view that, for smaller tax-based municipalities, any revenues the "hotel tax" might yield would be offset by the costs of administration.

Aside from Yellowknife, none of the five remaining tax-based municipalities indicated that they would be interested, at this time, in exercising the new authorities provided by the bill. There was, however, general agreement that the City of Yellowknife should have the right to exercise these new authorities if it chooses.

Tourist Accommodation Tax

Both the Yellowknife Chamber of Commerce and the City of Yellowknife expressed support for the bill. Mr. Kyle Thomas, vice president of the Yellowknife Chamber of Commerce, noted that the chamber would like to see the tax rate reduced from 4 percent to 3 percent. The City of Yellowknife raised concerns about the lengthy list of exclusions, which would reduce the total amount of revenue collected and make it difficult for front desk staff, who would be required to determine a person's reason for travel and whether or not an exemption applies.

Both the Yellowknife Days Inn and Suites and the Explorer Hotel offered conditional support for the bill. The support of the Explorer Hotel was based on the following conditions:

  • A 3 percent levy on the daily room rate;
  • Applicability to all accommodation properties;
  • No exemptions;
  • Industry oversight of fund management; and
  • No spending on convention or meeting facilities or on destination or visitor services, events or facilities.

The Yellowknife Days Inn and Suites expressed the view that "the draft as written falls short of the intended purpose of the levy," noting concerns about the exemptions in the bill and stressing that Section 70.3(1) must clarify that the levy's primary purpose is to promote Yellowknife.

Both the Town of Fort Smith and Embleton House B&B are not supportive of the bill. In correspondence to the committee, Fort Smith Mayor Ms. Lynn Napier-Buckley said that, "When this change was first proposed by MACA, the Town of Fort Smith requested an impact assessment to be performed, which we have not received," noting that, "while the choice to provide this program is the decision of the municipality, it is a concern that this revision will be closely followed by reductions to territorial programs." She also asked, "What will the GNWT provide to ensure equity for the smaller communities in promoting and selling tourism outside of Yellowknife with this change?"

In explaining her lack of support for the bill, Ms. Faith Embleton of Embleton House B&B emphasized that, with the number of unlicensed accommodations popping up online, now is not the time to implement a tourism levy, but to work to ensure that unlicensed operators meet appropriate standards, noting that, "When they arrive, travellers often face substandard accommodation and sometimes no accommodation at all, leaving them out on the street when things get busy."

I would now like to turn it over to the Member for Deh Cho. Thank you, Mr. Speaker.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

Page 4582

The Speaker Jackson Lafferty

Masi. Member for Deh Cho.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

Page 4582

Michael Nadli Deh Cho

Thank you, Mr. Speaker.

Energy Upgrades and Retrofits through Local Improvement Bylaws

Committee did not receive a great deal of substantive input on this aspect of the Bill. In Committee's discussion with representatives from the Town of Inuvik, Mayor McDonald noted that it is a good idea in principle but, again, more of a Yellowknife issue given that smaller municipalities are less likely to have the resources to allow them to finance private improvements.

In her letter to the committee, Fort Smith Mayor Ms. Lynn Napier-Buckley said that the "proposed change allowing the local improvement mechanism to be used for energy efficiency upgrades is...unnecessary and detrimental," pointing out that Municipal and Community Affairs had already advised that municipalities can apply the local improvement charge to individuals and further noting that municipalities are not set up as banks or lending institutions.

What We Did

In considering the input received, committee gave a great deal of consideration to the fact that the proposed amendments to the CTV Act do not compel or obligate a tax-based municipality to exercise either of the new authorities. Instead, Bill 18 provides for the new authorities, in law, for any municipality that wishes to exercise either, or both. Just as the Government of the Northwest Territories has argued for greater autonomy from the federal government, committee members believe it is important that municipal governments be given appropriate latitude to respond to local circumstances and needs. For this reason, the committee is generally supportive of Bill 18.

Tourist Accommodation Tax

Tax Rate

Committee took note of the suggestions from the Yellowknife Chamber of Commerce and the Explorer Hotel that the proposed rate for the tourist accommodation tax be reduced in the bill from 4 percent to 3 percent. Clause 2 of Bill 18 proposes to create a provision in the CTV Act [Section 70.1(4)] which sets the maximum rate of the tourist accommodation tax at 4 percent of the daily accommodation rate.

Committee feels that this appropriately allows municipalities the discretion to set a rate lower than 4 percent if that is the wish of the municipality. Committee finds that this is in line with the hotel tax rate in other Canadian jurisdictions, noting that travellers to the NWT do not pay a provincial sales tax in addition to the accommodation tax. Committee encourages the City of Yellowknife to give consideration to the wishes of the Chamber of Commerce and Yellowknife hoteliers in setting a final accommodation tax rate.

Mr. Speaker, I would like to now pass the floor to my colleague, Mr. McNeely, the Member for Sahtu. Mahsi.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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The Speaker Jackson Lafferty

Masi. Member for Sahtu.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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Daniel McNeely Sahtu

Exclusions

The most significant issue that committee heard feedback on was the manner in which exclusions are addressed in Bill 18. Concerns about the exclusions were twofold: that the breadth of exclusions would have a negative impact on potential revenues and that it would be left to the hotel front desk staff to determine who qualifies for exclusions under the act. The following summarizes the feedback received on the subject of exclusions.

Town of Inuvik: The Mayor noted that hotels have issues with how they'll manage the tax, especially exclusions. One of the town councillors disagrees with the governments being exempted.

Days Inn and Suites Yellowknife: "Exclusions will have the effect of diluting the amount collected to the point where it is doubtful that the total amount collected on an annual basis less expenses will be an amount that would be effective in fulfilling the purpose for which the levy will be enacted in the first place."

City of Yellowknife: "The city would prefer that the Bill 18 did not contain such an exhaustive list of exclusions. Each exemption affects the overall amount to be collected. The city's second concern related to the administrative burden that the current draft of the legislation places on accommodation providers. As written, the legislation requires front desk staff to make a determination about a person's reason for travel and whether an exemption applies."

The Explorer Hotel: "The accommodation levy must be charged on all guest types (leisure, business, government, and personal). It would be difficult for a front desk worker or reservations agent to challenge a government official as to the purpose of their trip."

Committee agreed that the bill, as drafted, has the potential to place an unfair burden on hotel operators to determine if and when the exclusions set out in Bill 18 apply to a customer paying for tourist accommodation. Committee is also of the view that the potential revenue yield for a municipality should be significant enough that it makes administration of the tax financially viable.

Committee considered two options to amend Bill 18 to address these concerns: the elimination of exclusions entirely; or the creation of an exemption only for NWT residents.

I will now pass it on to my colleague, the Member of Hay River North.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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The Speaker Jackson Lafferty

Masi. Member for Hay River North.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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R.J. Simpson Hay River North

Thank you, Mr. Speaker.

Energy Upgrades and Retrofits through Local Improvement Bylaws

While committee appreciates that support for this proposed amendment to the CTV Act is not universally supported, committee did not hear any substantive input that caused it to consider any amendments to this part of Bill 18. Committee recognizes that there do not appear to be any tax-based municipalities, other than Yellowknife, who are interested in exercising this authority at this time. Committee is comfortable that Bill 18, as written, does not compel participation where a municipality does not desire it.

As fuel costs continue to rise and people look for other ways to do their part to reduce their carbon footprint, innovative approaches to achieving greater energy efficiency will be increasingly in demand. The committee applauds the City of Yellowknife for demonstrating leadership in this area and hopes that other tax-based municipalities can learn from the City of Yellowknife's experience with financing private energy upgrades using local improvement charges.

Clause-by-Clause Review of the Bill

The clause-by-clause review of the bill was held on October 25, 2018. At this review, the committee moved the following motion:

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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Motion 1

To amend clause 2 of Bill 18 by deleting the proposed subclause 70.1(5), which contained the list of exclusions, and replace it with a single exclusion for residents of the Northwest Territories.

Committee feels that this exemption, which would require only that a person paying for accommodations show any proof of residence or government-issued identification card, would simplify administration and ensure that the tax was truly targeting the tourist market as intended.

The Minister did not concur and the motion was defeated.

I would now like to pass the reading on to the Member for Kam Lake. Thank you, Mr. Speaker.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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The Speaker Jackson Lafferty

Masi. Member for Kam Lake.

Committee Report 9-18(3): Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act
Reports Of Standing And Special Committees

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Kieron Testart Kam Lake

Thank you, Mr. Speaker.

Conclusion

During the course of this review, the Honourable Alfred Moses, Minister of Municipal and Community Affairs, twice advised the committee that he would not consider amendments that committee was proposing to the bill because the department had not consulted with their partner organizations on the committee's proposals.

While acknowledging that it is the Minister's prerogative to concur with committee's amendments or not, committee reminds the Minister that standing committees have the authority to carry out their own consultation on a given bill and to propose amendments to that bill. Committee encourages the Minister to ensure that MACA's partner organizations understand that, when the department is consulting on the development of the bill, that consultation is only one of at least two consultations that will take place, with the second being the consultation done by the standing committee. Committee welcomes input when it is consulting on bills and is always happy to hear from the GNWT's partner organizations on legislation that is before committee.

The committee thanks the public for their participation in the review process and everyone involved in the review of this bill for their assistance and input.

Following the clause-by-clause review, a motion was carried to report Bill 18: An Act to Amend the Cities, Towns and Villages Act, as ready for consideration in Committee of the Whole. This concludes the standing committee's review.