Mayor Brad Mapes says it is a financial hit that the Town of Hay River can’t absorb.
That is not getting paid the $1.3 million is back taxes and lease payments owed to the municipality by the defunct Northern Transportation Company Ltd. (NTCL).
“Our town basically cannot take a hit of $1.3 million,” said Mapes.
And he is looking to the GNWT – which bought the assets of NTCL in late December – for help.
“When the GNWT bought the assets of NTCL, they’re not saying that they bought the debt of the company,” said the mayor. “So the back taxes and the back lease payments are items that they’re stating are not their responsibility. It’s still within the NTCL’s bankruptcy group to look after it.”
Mapes said his view is that, in the real world, title to lands wouldn’t be transferred to another person until back taxes are all covered.
Hay River is very thankful the territorial government stepped up to the plate to buy the assets of NTCL, he said. “It’s a great benefit to our community, but it’s also a great benefit to the whole Northwest Territories, for the communities that are serviced by barging.”
The mayor said no barging would have added a huge cost to the GNWT for shipping to those communities.
Mapes noted the town is working with the GNWT on ways to work with the ownership group of NTCL to cover the money owing or find some other means of dealing with the outstanding debt.
The town’s lawyers are also trying to get the ownership group of NTCL to pay the back taxes and lease payments.
“But we need to have big brother GNWT helping us along the way, too,” Mapes said, explaining it would have more leverage that the town could have.
Along with NTCL’s back taxes and lease payments, Mapes said the town is also being underfunded by about $5 million annually by the GNWT.
“So we as a town have been able to manage our town without that money, but for us to swallow another $1.3 million I think it’s asking our town too much,” he said.
Mapes said he has discussed his concerns with the premier and cabinet ministers since the GNWT bought the NTCL assets, and has given them ideas of ways to come up with the money.
“I’m pretty confident that the GNWT will come forward and find a solution that will work for both of us,” he said.
One possibility is the GNWT could sell off some surplus land or equipment previously owned by NTCL.
“Maybe there’s a possibility that the GNWT could pay off some of the back taxes with that money,” Mapes said.
If the $1.3 million is not recovered, the mayor said the shortfall could affect some of the operations of the municipality and impact capital projects, such as road construction.
John Vandenberg, the assistant deputy minister of programs and services with the GNWT’s Department of Infrastructure, said the government didn’t assume any of NTCL’s debt in its purchase.
“We bought the properties and the various assets, but we didn’t buy the business,” he explained. “So we didn’t buy the debts of the business. We didn’t buy the accounts receivable or the accounts payable. We just bought the assets.”
Vandenberg said that means the GNWT is responsible for the property taxes and lease payments from Dec. 22, 2016, when it became the owner.