Marci cho, Mr. Speaker. Mr. Speaker, I have questions for the Minister of Lands on the leases and taxes and rent or whatever the term is for land tenure. I'd like to ask the Minister if he would look at lowering the cost of land lease or rentals at least in the communities I represent. I don't know what the situations are in others. So I'd like to ask that question first. Thank you, Mr. Speaker.
Masi. Minister of Lands.
Mr. Speaker, the department is attempting to rationalize the leasing procedures so that the amounts of lease payments on both Commissioner's lands and territorial lands will be the same. I don't think we could make specific exceptions for any communities.
I just didn't want to speak for other communities, but that's generally what I'm looking for. So if they're making them the same, I'm assuming that the Minister is now talking about going with a more reasonable amount? On the leases, previously we were getting leases in small communities for about $600 a year, and for the value and if you compared to other communities that's very much in line, but now we have new leases on old houses that could be as high as $4,000, which is kind of comparable to paying taxes on a house that's worth $750,000 to $1 million in the City of Yellowknife.
Yes, we are contemplating an increase of the current minimums. There hasn't been a change for many years. Again, the lease payments are based on the assessed value of the property.
The assessed value being applied to any piece of property when you're developing a tax, you use a mill rate; currently, the department is using 10 per cent as a mill rate. So effectively it's not really a mill rate; it's a rent, but they're essentially using 10 per cent of the value.
So you have a piece of property there that's appraised in accordance with the land policy at roughly $40,000, which is pretty standard across the small communities; the taxes or the rent or the lease on that property is $4,000. That's totally unreasonable. I don't want to talk about the increase to the minimums; that's another matter altogether. We're increasing either from $250 up or $600 up, but to go to $4,000 is very unreasonable. Will the Minister look at that?
The Member opposite has referenced the 10 per cent on which the land rentals or leases are based; that's a long-standing procedure, and I would submit that it is reasonable.
Masi. Oral questions. Member for Tu Nedhe-Wiilideh.
Thank you, Mr. Speaker. I didn't hear if the Minister said it wasn't reasonable or it is reasonable, but if he said it is reasonable, of course I have to disagree. We have elders in the community and, fortunately, they get the seniors relief, tax relief, so in this particular situation or this type of situation it's 50 per cent. So an elder whose income is Old Age Security, which is approximately $1,000 a month, is asked to pay $2,000 after their tax relief is applied, $2,000, so that's two months' worth of income for that elder. So is the Minister telling me that it's reasonable for people everywhere to pay two months of their salary to land taxes for one year? Thank you.
Thank you, Mr. Speaker. I simply said that the tax rate was and is reasonable. It's based on a fair assessment of the property. The property is assessed and the leasing costs are then applied. As the Member opposite has noted, those who are seniors do get a discount.
Masi. Oral questions. Member for Mackenzie Delta.
