Existing Sidney businesses are getting another break on their business license fees, but plans for a permanent break could end up costing up them in the future.
Mayor Cliff McNeil-Smith voted with Couns. Sara Duncan, Chad Rintoul and Peter Wainwright to waive the annual business license fee of $100 for 2022. It marked the second year of doing so for the municipality, as a support for businesses affected by the pandemic. Couns. Barbara Fallot, Scott Garnett and Terri O’Keeffe opposed the measure.
Staff will also prepare a report looking into a perpetual business license program, under which only new businesses would pay a one-time fee. Langford is the only Capital Regional District municipality with such a policy in place.
According to a staff report, revenues from annual business license fee renewals in Sidney total $85,000. Should renewal fees be eliminated, the estimated revenue from new applications would be about $10,000 each year.
The current program is not revenue neutral, said Andrew Hicik, Sidney’s chief financial officer, noting that the largest cost by far in the program is the annual fire inspection of businesses done as part of the renewal process. The inspections benefit not only businesses, but Sidney at large, he added.
“The business community at large has considered it a benefit to have business license fees waived, not so much for the cost – because they are paying $1.8 million in taxes each year — it is that they pay those levels of taxes and then are asked for another $100 each year,” said McNeil-Smith in defending the decision as an efficiency measure. He also predicted that Sidney’s recent introduction of new software would bring additional efficiency and savings.
Wainright said earlier that he proposed waiving the fee because the idea was previously considered.
“I pay a business license (fee) for my home-based business and I can’t imagine that I get anywhere near $100 worth of value from that on an annual basis,” he said. He suggested he’d be willing to take a hard look at the idea of charging for fire inspections and not the license fee.
O’Keeffe said $100 would not make or break a business and expressed concern about losing revenue for future projects under the heading of economic development.
“If we are concerned about supporting our business community, I would rather have that $85,000 sitting there perhaps available … we would be in a better position to do something rather than give each a business a break for $100,” she said.
O’Keeffe also expressed concern about the tax implication of waiving the fees for another year, a point addressed in the staff report. While Sidney’s Safe Restart funding will cover the cost for 2022, that source of funding will eventually run out and the lost revenue would be passed on to the community through general taxation, the report stated.
“The business community would bear a share of this additional taxation at a rate of about 2.5-to-1 compared to residential properties,” the report read.
Duncan voted for continuing the fee waiver, after initially favouring reinstatement and calling the waiver a “purely symbolic gesture.”
“I feel the public at this point 18 months into (the pandemic) has lost all appetite for symbolic actions, when the thing that is threatening their businesses is not a $100 license fee,” she said. Duncan also opposed a perpetual business license program in her earlier comments.
In a statement to Black Press, Duncan acknowledged her earlier opposition, while explaning her voting behaviour.
“However, as (Coun. Wainwright) and the Mayor clarified their positions on why it was a genuine potential financial benefit to the town and for businesses, which was new information for me, I changed my vote,” she said.
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