Courtenay staff will compile a report on the possibilities of a modified commercial tax system after Mayor Larry Jangula brought the matter up at Monday’s council meeting.
Jangula regularly keeps in touch with downtown business owners, and he spoke to a handful on Friday who told him things are tough for small business these days.
“They’re really hurting; they’re suffering a lot,” he told the Record after the council meeting, adding there’s no one reason small businesses are feeling the crunch and pointing to online shopping, consumer confidence and competition from big box stores as a few of the reasons besides the commercial tax rate multiplier.
“I don’t think it’s any one factor alone that’s causing this, but I think we can’t deny the fact that they’re hurting, and that if you walk around in the downtown area, you see vacant stores, you talk to other owners who are thinking about closing out soon — to me, it’s a huge concern.”
Council lowered the commercial tax rate multiplier from 2.9 times the residential rate to 2.85 times the residential rate in the spring, and has been lowering it for a number of years. However, each decrease of the multiplier has meant an increase in residential tax rates to achieve the same amount of tax revenue for the City.
“I know that it opens a can of worms about where does the money come from,” Jangula said to council, quickly pointing out he doesn’t want to raise residential property taxes.
Instead, he wants to see a number of different commercial rates — as now the multiplier is the same for all commercial properties in Courtenay — and he would like to offset a lower multiplier rate for small businesses by raising the rate for big business, rather than homeowners.
“We collect the same amount of money from business, it’s just that different businesses pay it in different proportions,” Jangula said when talking about what he considers an ideal situation.
However, Jangula pointed out the Province has to change the rules first to allow municipalities to vary their commercial tax multiplier rates.
He noted the Association of Vancouver Island and Coastal Communities (AVICC) and the Union of BC Municipalities (UBCM) have been discussing the issue for some time. He added the BC Mayor’s Caucus is due to meet in about six weeks and Jangula hopes to add the topic on the caucus agenda — with support from Courtenay council.
Coun. Manno Theos said he couldn’t agree more with Jangula’s desire for flexibility with the multiplier.
“It’s something that I’ve been thinking about for years now is something along those lines is ability to pay,” said Theos, adding big businesses may have an easier time covering costs than smaller businesses.
Coun. Jon Ambler noted the matter is complicated and said he would like to hear more about it.
“I’m certainly interested in having experts examine it and come up with the benefits and come up with the risks because they’re both going to exist,” he said.
Couns. Ronna-Rae Leonard and Starr Winchester also expressed interest, and Coun. Doug Hillian made a motion to have staff do up a report with more information on the “implications and possibilities” of modification of the multiplier.
Hillian’s motion was passed unanimously by council with Coun. Bill Anglin absent.
When asked after the meeting about big business reaction to any possible change in the future, Jangula said: “I think there’d be a concern — there’s always a concern when there’s a change, especially when it involves tax dollars — but my biggest fear right now is if we keep going the way we are and trying to apply a one-size-fits-all we’re going to lose a lot of our businesses.”
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