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Council set to review businesses’ share of tax load in Sidney

Sidney council has retained long-standing plans to review the municipality’s existing taxation policies by the end of June 2022 despite concerns about staff availability.

The decision comes after councillors discussed the 2022 strategic plan after receiving a staff report with a list of recommended changes. Councillors could also offer their own amendments, a process that generated some criticism toward the end of discussions, which eventually saw Mayor Cliff McNeil-Smith cast the deciding vote against his own motion to drop the review.

Couns. Sara Duncan, Terri O’Keeffe and Chad Rintoul voted in favour of dropping the review, while Couns. Barbara Fallot, Scott Garnett and Peter Wainwright voted with McNeil-Smith in retaining the review.

Owners of business properties have historically paid a higher tax rate than owners of residential properties. In 2020, for example, business property owners paid 2.44 times the amount paid by residential property owners, according to a staff report. In 2021, this multiplier rose to 2.52. Residential properties’ share of paid property taxes (73 per cent) is less than their total share of assessed properties (87 per cent), raising questions about fairness.

The subject has loomed large in recent years. Staff in October 2020 supplied an extensive presentation on the subject, but the municipality ultimately held off on a review after learning that it would receive $2.75 million in re-start grant money from senior governments to deal with the effects of COVID-19.

RELATED: Commercial property owners in Sidney face nearly 28% tax increase

RELATED: Assessments vs. property tax: Greater Victoria valuations soar, taxes may not

McNeil-Smith made the initial recommendation to drop the review, saying it would have been one of seven major initiatives including the Official Community Plan (OCP) review scheduled for completion by June 2022 in worrying about the availability of staff in the face of the fifth COVID-19 wave, all while engaging in extensive public engagement.

“I don’t think anyone on council was more in favour of this tax policy review than myself, knowing that it has been long-standing,” he said during the discussion. “But at the same time, I don’t want to have any sense of false expectation from the business community or the community at large that this is something that there is a good prospect we could have (this done).” COVID-19, he said later, is already impacting staff resources.

He also pointed out that any changes in tax policy following a review would not impact this year’s budget. “It would be prudent to put it to the next council to consider at the beginning of their term and their strategic plan.”

Staff said that they would be hard-pressed to do the review in light of other requirements.

“At this point, I see it as very difficult to achieve this taxation year, just because of current and anticipated staffing pressures,” said Andrew Hicick, Sidney’s director of corporate services and chief financial officer. “If council really consider this is a priority, I would have to perhaps look at deferring other work.” Chief administrative officer Randy Humble told council that this issue could pull staff away from other priorities.

Wainwright questioned the recommendation to drop the review in both terms of substance and process. The pandemic has really challenged businesses, and council has been looking for ways to help them by shifting the burden, he said.

“Yeah, we have had some discussion on this, but lacking any policy direction, it gets dealt with totally in an ad-hoc way and the (multipler) drifts with the tax base,” he said. “After a couple of years, it was worse than it was before.”

Wainwright acknowledged that staff might not be able to come forward with something because of other priorities. “But if we deliberately punt it to the other council, it is definitely not happening,” he said. “This is a difficult thing for an experienced council to deal with, let alone a new council.”

He later also questioned the process around introducing revisions. “So here we are today, with essentially the final draft before us and we got a motion of the blue, unsupported by any kind of staff report, to drop one of the priorities, because leaving it in there might impact some other things, which might or might not be a higher priority from council’s point of view.”

McNeil-Smith responded to this comment by saying that he would concur with Wainwright from a process point of view. “I think the one significant change is that we weren’t in the fifth wave of the pandemic when we had our original draft. But I respect those views.”

He said staff will be able to set priorities or advise council if priorities change through the year.

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