In his budget speech a couple of weeks ago, Finance Minister Robert C. McLeod said: "Affordable housing is a priority for this assembly."
On Yellowknife retail listings, a typical single-wide trailer is selling for more than $350,000.
This is the reality of market housing in what is generally considered to be one the most expensive cities in Canada to own a home.
So it's curious that in one breath McLeod can insist affordable housing is a priority while in another, propose yet another cost hurdle that will surely make purchasing a home in the North more difficult.
The NWT does not yet have a land-transfer tax on property sales but the territorial government is seriously considering one apparently.
McLeod said such a tax would raise $3.1 million annually – and could be structured progressively by levying a smaller percentage on property of lower value to lower the impact on modest-income homeowners.
Like Alberta and Saskatchewan, home buyers in the NWT currently don’t pay land transfer taxes but smaller land transfer fees instead. The fee on a $450,000 property in the Northwest Territories is around $675.
If the NWT follows the Ontario example, however, a land transfer tax will be much higher.
That same property in Ontario would cost you an additional $5,475 (plus another $5,475 in Toronto). In Winnipeg that figure would be $6,700 and in Fort St. John, B.C., it's $7,000. There are some rebates available to first-time home buyers, however its clear land-transfer taxes are major expenditures where they do exist.
We note since most of the private property transactions in the NWT are in Yellowknife, a land-transfer tax would essentially be yet another subsidy by Yellowknife of the rest of the territory.
But more worrisome is the effect a land transfer tax would have on the territory's attempts to grow its population. We note that it's been long standing policy at the GNWT to increase the territory's population.
Alas, other than Newfoundland, the NWT is the only jurisdiction in Canada with a declining population. The high cost of living, particularly in Yellowknife, is undoubtedly a major reason why people are reluctant to move to the North.
It would seem awfully counterproductive to implement a tax that would surely make buying a home and moving here less attractive when that family considering a move to the territory represents around $30,000 per person in federal per capita funding.
Here an idea. Instead of dreaming up taxes that hurt Yellowknife and shooting themselves in the foot in the long run, why doesn't the minister get around to finally implementing a tax that would actually benefit the city?
Legislation that would allow the city to implement a hotel levy to help it market its tourism industry has been stuck in limbo since 2010.
For those who worry about the effect a hotel levy would have on tourism, along with the recently implemented airport improvement fee, we will will point out this: every hotel room in the city was booked earlier this week.
We know because we tried getting a room for a new employee and couldn't get one. If the airport improvement fee is not stopping tourists from coming here, a five per cent hotel levy won't either.
What will stop people from coming here is a tax demanding thousands of dollars without yet even giving prospective residents of the NWT the pleasure of paying a heating or power bill in Yellowknife.