Sidney council continues to prepare the ground for changes to its municipal tax policy in favour of businesses.
Council voted unanimously to use the 2020 taxes rate as starting point for yet-to-be-finalized tax rates in 2021. Council had earlier this spring decided to reduce business taxes by 10 per cent for 2020 to help local businesses weather the COVID-19 pandemic.
Council’s most recent tax move makes that cut permanent for the foreseeable future with potential other changes in the works as staff are currently working toward ways of easing the tax burden of non-residential properties (minus recreational marinas) with a corresponding shift toward residential properties.
But this most recent move will also force the municipality to find an additional $300,000 to what make up the ‘lost’ revenue.
According to a presentation last month from Andrew Hicik, Sidney’s director of corporate services and chief financial officer, residential properties account for 87 per cent of Sidney’s assessed properties, they “only pay” 73 per cent of property taxes. “Whereas commercial properties make up only 11 per cent of the assessment base, but they roughly pay twice that in terms of taxation,” he said.
RELATED: Sidney plans 10 per cent break on commercial taxes, zero increase for general property
Owners of light industrial and commercial properties paid 2.44 dollars in municipal property taxes for every dollar paid by owner of residential properties in 2020 under the amended rates.
This difference would have been even higher had council reverted to the pre-cut rates of 2019 when the multiple was almost three-to-one to the detriment of light industrial and commercial property owners.
According to the report, the Canadian Federation of Independent Businessses, a pro-business lobby group, has been advocating for a commercial multiple of two. Sidney currently does not use the multiple method to divide up the tax burden. It (like all municipalities with some minor exceptions) currently collects a stable share of taxes from each class of property owners, with residential and commercial properties being the two largest category. The categories of utilities, light industrial and recreational properties make up negligible shares.
Discussion among councillors so far has pointed toward a broad but not necessarily unanimous desire to lower the burden on light industrial and commercial property owners against the specific backdrop of COVID-19 but also the more general wish to keep Sidney competitive.
Coun. Terri O’Keeffe worried earlier this month that Sidney’s proposed direction may have a detrimental effect on residential payers, especially younger families with children. She voted against using the 2020 rates during committee-of-the-whole earlier this month.
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