Sidney plans 10 per cent break on commercial taxes, zero increase for general property

Plans now await public input with decision set for April 27 meeting

Pending final public input, Sidney plans to reduce the general property tax increase to zero and give owners of commercial and light industrial properties a 10 per cent break following Monday’s special council meeting. But not all members of council agreed with the proposed move, with Coun. Sara Duncan calling it the “equivalent of banging pots and pans.”

The proposed measure now awaits public input with councillors set to make a final decision at their next regular meeting on April 27.

Mayor Cliff McNeil-Smith joined Couns. Barbara Fallot, Scott Garnett, Terri O’Keeffe, and Chad Rintoul in signalling support for the measure, against the opposition of Duncan as well as Coun. Peter Wainwright.

Sidney convened the April 20 special council meeting after the provincial government announced additional measures to help business with a total tax relief goal of up to 25 per cent. (The proposed measure would reduce the total tax bill by 23.5 per cent, with the provincial measures included).

Councillors were planning to consider two relief options, one calling for a five per cent break, the other for a 10 per cent break, on April 27 following a meeting last week. But the provincial announcement soon thereafter forced the municipality to speed up its process in light of what McNeil-Smith called “pleasantly unexpected” changes.

McNeil-Smith called Monday’s decision “challenging” in framing it as a strong signal to the local business community. If approved, it will save the average business that spent $12,425 in total taxes last year $2,900, he said, adding that the amount is greater for larger businesses.

“We appreciate the enormity that you are facing to continue to business into the longer term in Sidney,” he said. “I think we have done something very significant at the local government level for the Town of Sidney to reduce our previously approved general tax increase to zero and then to give this significant 10 per cent reduction in addition to commercial properties,” he added later.

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Pending final approval, Sidney plans to fund the proposed tax break with a total value of just under $549,000 from its “excess” amount of accumulated surplus, which the municipality defines as the amount exceeding its minimum level of accumulated surplus.

According to a staff report, this “excess” adds up to $800,000, and Andrew Hicik, Sidney’s director of corporate service repeated earlier comments that he was comfortable with council’s preferred option, while acknowledging the absence of guarantees about the future.

Hicik said last week that Sidney’s challenge lies in trying to find the “right balance between helping out now and not crippling” itself in the future and this tension between the immediate present and the future revealed itself throughout the debate.

While Garnett described himself as penny-pinching in his private life, he also added that he wants to do everything possible to help local businesses and their employees in expressing support for the 10 per cent reduction. “This is what we can do as a council,” he said. “It’s pretty much the only thing we can do.”

Rintoul agreed, adding later that this move also aims to shore up public confidence.

Duncan disagreed with the direction of her colleagues in questioning the efficacy of the proposed reduction, which would shift the tax burden on residential property owners.

The proposed relief for commercial and light industrial property owners will likely end up making little difference for individual businesses, she said, arguing that Sidney might have to deal with the immediate effects of the COVID-19 pandemic for two years. She added that the municipality must also think about how it recovers from the economic effects of the pandemic in the long-term, a prospect that might take eight years if the last financial crisis offer any guide. With another $160,000 to $190,000 in its municipal coffers, Sidney might actually be able to do something in terms of long-term recovery planning, she said.

“I know everybody is saying that they want to send a signal to the businesses, but I feel like that is really all what that measure would be — sending a signal, but not actually providing something that would be meaningful,” she said. Sidney needs to think “holistically” about meaningful measures instead of sending a signal, “the equivalent of banging pots and pans,” Duncan said.

Wainwright agreed. Sidney, he said, needs to consider stimulus spending, and if the municipality has “basically blown” its resources on commercial tax relief now, it will have tied its hands in the future.

Rintoul disagreed with the argument that the measures are symbolic, adding that Sidney must also “critically look” at its expenses.

Fallot noted that it is difficult to predict the future. Sidney will offer relief now, then look at other moves in the future, she said.

Councillors also signaled support for changing some key dates concerning tax collection. July 2 is set to remain the due date for residential taxes, but penalties will not kick in until Aug. 1, with a five per cent penalty on outstanding amounts due then. An additional five per cent penalty will kick in after Dec. 15.

The provincial announcement from last week made Sept. 30 the effective due date for most commercial taxes. (While the due date of July 2 remains, the penalty date moved to Oct. 1.) Sidney plans to spread out the penalties, starting with five per cent after Sept. 30 and an additional five per cent after Dec. 15.


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