If City of Powell River Council follows staff recommendations, all organizations applying for permissive tax exemptions will end up paying part of the property taxation assessed in 2023. The question is, will it be 80 per cent, or 86 per cent?
At the August 25 finance committee meeting, city chief financial officer Mallory Denniston said the purpose of her presentation to council was to seek direction for the 2023 permissive tax exemptions. She said exemptions are granted through the Community Charter, in two ways.
One is a statutory exemption, for places of worship, hospitals, schools and some other property types. The other is permissive exemptions, which are not granted automatically to qualifying organizations and must be adopted and implemented each year by council through bylaw, she added.
Section 224 of the Community Charter provides for permissive exemptions for land or improvements owned or held by a variety of nonprofit organizations that council considers are used for a purpose directly related to the organization, said Denniston.
“To be eligible, an organization must be charitable, philanthropic, or other not-for-profit corporations,” she added.
For 2023, there were 85 permissive tax exemption applications, totalling $496,601 in municipal tax exemptions. Denniston said all applicants’ financial statements were assessed to ensure reasonable financial need. It was noted that Lift Community Services of qathet Society carries an excess of roughly $1 million.
As a result of this, two scenarios were being proposed. The first was that all applicants, including Lift, receive an 80 per cent exemption, totalling $397,281 in municipal taxes being exempted. The second is that if Lift is deemed to have too much cash to qualify under the criteria, the scenario would be that all applicants except Lift receive an 86 per cent exemption, totalling $395,966 in exempted taxes.
Denniston said in granting permissive tax exemption, the burden of lost taxation to the city falls onto existing taxpayers, since the total taxable value is lowered by the value of the properties exempted. She added that as a result, the taxation burden from other agencies such as qathet Regional District, School District 47 and others, is also shifted to the other taxpayers.
“The property taxation for these other authorities accounts for roughly one-third of property taxes owing for an average single-family dwelling,” said Denniston. “Council therefore balances the permissive taxes granted to organizations that give back to the community with the offsetting impact of the tax burden being shifted to other taxpayers.”
Denniston said a cap of $400,000 was applied to the 2022 permissive tax exemptions, since applications were growing at a rapid rate year-over-year. She recommended implementing the same cap of $400,000 to the 2023 exemptions. This would represent 1.89 per cent of total municipal taxation.
Mayor Dave Formosa said it was maybe time to look at the different pieces of large social enterprises such as Lift and inclusion Powell River, because the taxes on taxpayers are becoming a burden.
“I’m very happy with your report,” Formosa told Denniston. “Can we look at what are charitable organizations, and those that are government services that have been downloaded so the government could save money? These organizations are great to have in the community but are eroding the tax base.”
He also suggested looking to see what other communities are doing.
Denniston said work is being done in these areas.
Councillor Maggie Hathaway said what council was looking at is actual need.
“When we are giving a permissive tax exemption, does this organization really need the money?” said Hathaway. “I think it needs delving into.”
Councillor Jim Palm said inclusion Powell River and Lift combined amounts to more than 20 per cent of the permissive tax exemption requests.
“Somehow, we have to find a way to cap some of that,” added Palm.
Denniston said many organizations granted permissive tax exemptions get by month to month, so they would likely appreciate the greater amount of exemptions. She said last year, the organizations received a 95 per cent tax exemption, and this year, it is proposed that they receive 80 or 86 per cent, so it is going to be a higher cost for those organizations.
Councillor CaroleAnn Leishman moved that council direct staff to prepare permissive tax exemption bylaws for all applicants, excluding Lift, to exempt 86 per cent of eligible assessed values from property taxes, totalling $395,966 in municipal property taxes. The committee gave unanimous consent. The resolution was referred to city council.
