Voting down the annual budget at a territorial level would be a vote of non-confidence that would dissolve the government and set the course for an election.

At a municipal level, the situation has left Mayor Ernie Bourassa wondering what the next step will be.

'Maybe we should all resign,' he commented following Monday evening's 3-3 vote for the 2004 budget, worth $61 million.

Whenever there is a tie vote on an issue, it is automatically defeated.

Coun. Dave Austin was absent from last night's meeting. Coun. Yvonne Harris, who voted against the budget, attended the meeting via conference call.

Councillors Mel Stehelin and Doug Graham also voted against the budget.

'We have no budget,' Bourassa told reporters Monday night.

The mayor said he will have to talk to city administration about the implications of the vote. He suggested it could be another month before the 2004 budget is passed.

This means no capital projects can go ahead, delaying some plans such as the renovations to the downtown Heritage Fire Hall which is set to be the headquarters for the 2007 Canada Winter Games.

In an interview this morning, Piers McDonald, the Canada Games Host Society president, said the defeat came as a surprise, but it's nothing that can't be overcome.

'It is, of course, disappointing,' McDonald said.

Although the tender for the second phase of the multiplex sports centre, being built for the games, hasn't gone out yet, it was scheduled to be advertised early this year.

While McDonald said he was 'a little surprised,' Bourassa said he was 'a bit astounded.

'Right now, I'm pretty much speechless,' he said.

Graham has said on numerous occasions he wouldn't vote in favour of a budget which proposed a two-per-cent tax increase this year as well as for the next two years. He believes the city can cover its costs in other ways.

'I don't like the tax increases,' Stehelin said in an interview this morning.

He would rather have seen the city cut one per cent of the budget from each city department, he added.

While the first-term noted he hasn't been stating his views on the issue at council meetings, he pointed out there's an old saying of 'Why speak and disturb a totally good silence?'

He also didn't speak up during budget committee discussions late last year when the city looked at possibilities for the 2004 budget.

'Some things are completely and totally on-hold,' Stehelin said.

Harris didn't say why she voted against the budget. Her vote came just after council defeated her proposal to improve transit service with an extra $100,000 for a downtown/multiplex/Yukon College bus loop.

Initially, there was a 3-2 vote in favour of the budget until Bourassa asked Harris for her vote.

'I don't think she understood what she did,' he said.

The budget will now have to be brought back to council as a notice of motion, city manager Bill Newell said after the meeting.

The city can continue operating on its provisional budget until Apr. 15.

After a notice of motion is brought back, council will have to go through voting on all three readings again. There also has to be some form of public input again.

'They'll have to decide what form (that will take),' Newell said.

Normally there is a public input session held before second and third readings of the budget.

The public input session was held earlier this month, but a number of delegates came out to council last night to speak on the budget as well.

Doug Hayward encouraged council to take a more holistic approach to economic development.

'Tourism is only one industry and a fickle one at best,' he said, after noting that Whitehorse's population is continually falling.

The city needs to be actively promoted, he suggested.

Donna Mercier of the Whitehorse Chamber of Commerce sought some answers as to why tipping fees are rising.

'The cost increase has to be justified,' she said. The city has cut garbage collection with the implementation of the Waste Watch program, she reminded council.

Under the Waste Watch composting program, the city picks up garbage on alternate weeks, while collecting compost every second week.

While residents continue to be restricted to four bags of garbage per pickup, there is no limit to the amount of compost a resident can leave at the curb for the city to pick up.

Members of the chamber have told Mercier they have found more garbage being left in their commercial bins since the city began the Waste Watch program.

Following the public input session, amendments are often proposed.

Earlier in last night's meeting, there was a 5-1 vote to amend the budget so an additional $25,000 from the city's capital reserve for the Main Street and the tipping fee boosts would be deferred until Apr. 1 with any impact on the budget from that being made up from the city's contingency reserve.

Council also voted to work with the Great Northern Ski Society to deal with annual start-up concerns and get a better understanding of Mount Sima's operating budget.

Graham was the only councillor to vote against the budget amendments.

The entire council voted in favour of increasing the budget by $570,000 to complete the renovations to the Heritage Fire Hall on the waterfront, with the tender going to Ketza Construction Corp.

Neither Bourassa nor Newell could remember council previously voting down a budget.

Newell took the job as city manager in the mid-1990s. While Bourassa was elected to his first term in 2000, he's lived in Whitehorse for most of his life.