By Cole Parkinson
Municipal District of Taber council is exploring the potential of bringing forward a sub-class bylaw.
From Finance Committee discussions in April, administration was requested to provide information around the option of split mill rates for non-residential properties and then recommended council to explore the option. During council’s regular meeting on July 9, several pieces of information were brought forward to gauge council interest in moving forward with a bylaw. One question was around when the ability to introduce sub-classes was official.
“I believe the changes (to the Municipal Government Act) were done in 2017 that gives municipalities the ability to create a small business sub-class in the non-residential class,” explained Bryan Badura, director of corporate services. “In the bylaw we brought forward, we just wanted to make sure everyone was up to speed and understood what was included in there. There is a potential of future assessment changes and things like that, which there is an indication the government is renewing those things as well, more than likely in the non-residential category.”
Criteria for qualification are the business has fewer than 50 full-time employees across Canada as of December 31, is not a designated industrial property and is owned or leased by a business operating under a business licence. The tax rate set for the small business properties also must not be less than 75 per cent of the tax rate for other non-residential property.
“My big concern is we don’t know what is coming down the pipeline for linear and non-residential from the province,” stated Coun. John Turcato.
With an estimated 400 possible properties in the M.D., the tax cut would result in a shortfall for the municipality. If passed by council, they could adjust how much of a break the small businesses were getting each year.
“With this bylaw, the financial implications that we are estimating, with the way the bylaw is written, there could be somewhere between $125,000 and $164,000 tax dollars that if we give the full 25 per cent reduction, that is the dollar figure we would lose out on. That amount would either have to be found somewhere in the budget or shifted to one of the other assessment classes in the future,” added Badura.
Council was receptive to the idea of moving forward with the bylaw.
A big reason for the support from council was around the fact that if the bylaw was passed, they could adjust it to their liking otherwise they would not have the opportunity to do so.
“I think it is a good incentive for small businesses because over the past couple of years the non-residential has taken the biggest hit for increases. Last budget they took 4.25 and they also have a higher mill rate to begin with. I know it can cost up to $164,000 but I think some of these smaller businesses are struggling a bit, especially if they are getting hit in this classification with oil and gas. I think the most frustrating part of it is you are budgeting $900,000 for bad debts and you have to push it back onto them, who are paying their taxes,” said Coun. Leavitt Howg.
As far as implementation of the bylaw, the end of October was when businesses would have to apply by.
“The declaration of this is on October 31 in the bylaw. Now, if they miss this date they have to wait for another cycle in order to qualify as a small business and get the potential small business reduction mill-rate,” stated Badura.
“It has to comply with the assessment cycle so even though you don’t send tax notices until mid-May, I have to have that assessment prepared not later than February 28,” added Angel Svennes, assessor.
Svennes recommended to council to give staff a full year of the bylaw in place before any changes were made to the cut off date to see how things worked.
Both first and second readings were passed unanimously.