After City of Powell River Council granted close to $350,000 in permissive tax exemptions for the 2020 tax year, mayor Dave Formosa is suggesting a review of the process.
At the finance committee meeting on Tuesday, October 22, Formosa said the permissive tax exemptions in the city are growing at quite a high rate. Permissive tax exemptions are granted by city council to qualifying groups and organizations, where property taxes for the city are waived.
Formosa said he thinks there is a need to have a discussion on capping the allowable amounts of permissive tax.
“We need to look at our permissive tax situation as a council and decide if we are going to keep letting it roll,” said Formosa. “We’ve noticed this year we’ve had a couple of more big hits.”
Formosa said he brought up the matter just for discussion purposes. He has talked to the chief administrative officer, chief financial officer and chair of the finance committee and he thinks it is something that needs to be talked about.
“We have some heavy commercial properties that have come out [of the tax roll] in the last few years,” said Formosa. “I would like to hear council’s thoughts and comments.”
He suggested the city looks at what other municipalities are doing with regard to permissive tax exemptions.
Councillor CaroleAnn Leishman said she agreed with taking a look at the mayor’s suggestion. She said there have been a few commercial buildings that used to pay taxes that were not previously receiving a tax exemption.
“I definitely think we should see some public outreach with the organizations that would be impacted by any kind of change to permissive tax exemptions,” said Leishman. “Perhaps we could look at a cap but we may also want to prioritize the categories we still want to consider as high priorities. Maybe with some of these recreational outfits, we need to rethink how much we given them in tax exemptions. I’m definitely in favour of going down this road.”
Formosa asked if the committee could receive a report on what other communities are doing prior to starting this process.
Finance committee chair George Doubt said he had spoken with the mayor and other people about the whole concept and added that qathet Regional District is having issues with the permissive tax exemption.
“We are not the only place having issues with the permissive tax exemptions,” said Doubt. “I’ve done a little bit of research on other communities and there is an interesting variety of policies. Some are specific and some have different percentages for different categories.”
Doubt said he was looking at Dawson Creek, which has a schedule for places of worship, one for housing and seniors, one for social-related projects and one for sports-related projects.
“They’ve decided to go with an upper limit of their tax exemption,” said Doubt. “For sports-related categories, they’ll forgive a maximum of $5,000. They’ve done a lot of consultation as well.
“We want to be really careful here because there are a lot of really worthy organizations in the community that depend on this. They are doing it in a constructive and cost-effective way and we don’t want to get in the way of any of these services.”
Doubt said there are other services that might be more discretionary and services the committee might want to think about.
“If we are going to open this, I’d like to do it very carefully and slowly and make sure we get a report on what other communities do and what we do so everyone can take a close look at what we want to accomplish and how we are going to help people in the community do things they need to do in a way we can afford,” said Doubt.
Formosa said his intent was to bring the matter up, have a discussion and listen to the wisdom heard.
“It isn’t taking a shot at anyone or anything, it’s just to have that discussion, and have our professionals take a look at what they can offer us by means of what is already happening,” added Formosa.
He said the first initiative should be staff doing some homework and research based on the permissive tax exemption bylaw and what others are doing.
“They can come back to us with a report on what other communities are doing and they can bring some ideas and suggestions we could take to council and think about and then decide on the next steps,” said Formosa.
Chief administrative officer Russell Brewer said staff would be happy to take that direction. He said there is also some flexibility in the current policy that has not been exercised as much as it could be.
“There’s a lot of options in the existing policy,” said Brewer. “That, coupled with what other communities are doing, might help provide council more direction.”
