by Peter McGuigan Residents of Powell River who live in the more modestly priced homes should take note that at a recent committee meeting their City of Powell River mayor Dave Formosa and councillor Debbie Dee spoke in favour of keeping Powell River’s current residential tax system. The current system involves owners of lower priced homes paying more tax than they should. The result is that those residents, who are fortunate enough to afford more expensive homes, can have lower property taxes.
The normal approach to taxation in all western-style democracies is that property and commodity taxes are based on value not on a flat or fixed rate that Powell River currently uses to collect some of the funds needed for their activities at city hall.
Not only did Formosa and Dee speak in favour of keeping the current flat tax, their arguments for doing so were blatantly misleading. No seniors in BC “stand the chance of getting pushed out of their homes” because of high property taxes, as Formosa is quoted saying in the Peak. There is a provincial property tax deferral program to prevent this from happening and as well there is additional tax relief available when one of the spouses is 65 or older.
As for a retired mill worker facing the possibility of losing their Marine Avenue home because of high taxes, as Dee claimed, what a bunch of nonsense. These workers not only have excellent pensions, it was their membership in a progressive Canadian industrial union that ensured they enjoyed some of the highest wages paid in Canada to working men and women. Wages were so high that at one time they were referred to as “cake-eaters” by members of less fortunate unions.
It was these excellent wages that enabled these mill workers to purchase these premium Marine Avenue properties in the first place. Seven out of 10 retired Canadians are not as fortunate as these mill workers. They do not have a supplementary pension. They have to make do with the standard federal Old Age Security and Canada Pension Plan benefits and any savings they might have.
The legislation that permitted the imposition of a flat tax as a source of municipal funding was enacted in the dying days of the BC Social Credit Party government and was rescinded in 1992. Currently, there are only five municipalities in BC that utilize this outdated form of revenue collection. All other local governments use the traditional, democratic form of progressive taxation based on property value.
Powell River council did vote in 2010 to gradually reduce their flat tax by five per cent a year. As a result by 2013 the flat tax had been reduced to $407 before adding on the normal, democratic and progressive value-based tax.
But, it looks like Powell River councillors may be reconsidering their 2010 decision. Council has requested a staff report and has referred the issue of flat tax to their upcoming budget meeting. Does this mean that the flat tax reduction will stop? Does this mean that Dee and Formosa are going to push for a higher flat tax? Does this mean that the less well-heeled residents of Powell River are going to be required to continue subsidizing the tax bill of the fortunate few who live in the higher cost homes?
Peter McGuigan is a retired small businessman and lives on Texada Island.
