Yukon municipalities say out-of-town residents are getting more than they pay for with taxes

Yukon municipalities are suggesting that it may be time for people living outside municipal boundaries to start paying more taxes.

The Association of Yukon Communities (AYC) passed a resolution in 2023 to urge the territorial government to "review current property taxes in areas peripheral to Yukon municipalities, and increase those taxes appropriately."

"This has been a resolution that comes up repeatedly at AYC," said Dawson City Mayor Bill Kendrick, who moved the resolution.

"It's not an easy subject and nobody likes to pay taxes or nobody likes to see increased taxes, but it's something all governments and all people are grappling with."

Kendrick says his town is dealing with higher and higher costs associated with providing municipal services. The idea behind the resolution is that people living just outside municipal boundaries often benefit from those services without always paying their share.

"I think there's just general knowledge out there that peripheral taxes are significantly lower than inside-municipality taxes," Kendrick said.

"A lot of Yukon communities have a concern that, you know, people wanna move in and they wanna live just out of town, they wanna pay lower taxes. And it's the municipality that continues to be burdened with, you know, clearing snow to people's places of work, providing recreation facilities, having the cost of water treatment centres."

AYC president Ted Laking, who's also a Whitehorse city councillor, said it's not just a question of raising taxes. He suggests a change to how municipalities are funded by the territory, through the Comprehensive Municipal Grant. 

"Municipalities are increasingly telling the government of Yukon, 'look, we're happy to provide services to all Yukoners, but it does cost us money to do this,'" Laking said.

"There is a strong case that we need to have that addressed through our funding formula from the government of Yukon, to help cover some of those costs."

The Comprehensive Municipal Grant was established by the territorial government in 1991, as a way to provide annual, unconditional funding to help Yukon's eight incorporated municipalities provide basic services to residents. 

Grants in 2023 ranged from $1.4 million for Teslin, to $8.5 million for Whitehorse. The territorial government announced in October that municipalities will see a ten per cent increase in grant funding in 2024.

Minister 'a bit reluctant to raise taxes in this environment'

Richard Mostyn, Yukon's minister of Community Services, said that increasing taxes for residents living outside municipal boundaries needs more explicit support from the AYC.

"I'm a little bit reluctant to raise taxes in this environment, but that's one of the motions that AYC put before me and I'm just looking for their support to bring that about. I'll need some some letters of support, some work on the part of AYC, to actually make that happen," Mostyn said.

Meantime, the idea doesn't sit well with at least one resident living just outside Dawson City.

Brent McDonald lives across the river from town in West Dawson, and says he receives none of the basic municipal services such as sewer, water, garbage pickup, or snow clearing. 

"We get essentially nothing given to us from the City of Dawson," he said.

Any services that he does use in town — for example, water fill-ups or the recreation centre — there are fees for, McDonald said.

"The city is trying to create a different income stream I guess, or a bigger income stream, and I'm not sure why they're targeting the outside-of-the-boundary property owners," he said.

"I mean, I'm not against paying my fair share for living in the Yukon. But I haven't seen any of the reasoning or any of the data or evidence suggesting that this is the best way forward, or even a reasonable way forward."