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Council votes to change tax rates

Business rates to rise while light industry to drop.
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City council votes on April 10 in its temporary council chambers to go ahead with equalizing the tax rates for Class 6, Business, and Class 5, Light Industry. Coun. Kevin Flynn was absent. - Image credit: Martha Wickett/Salmon Arm Observer.

After much discussion, input and weighing of pros and cons, city council has decided to make the municipal tax rate for business and light industry classifications the same.

The move comes in an effort to retain existing industry and to attract new ones considering moving to the city.

This means that those businesses classified by BC Assessment as Class 6, Business and Other, will see their rate increase while those categorized as Class 5, Light Industry, will receive a lower rate.

The 2016 rate for Light Industry was $18.71 per $1,000 of assessed value, while the Business rate was $11.66 per $1,000.

With the adoption of the bylaw, scheduled for April 24, the tax rates will be equalized to $11.95 per $1,000 for both classifications. For Business, that means an increase of $45.63 for every $100,000 of assessed value while Light Industry will see a decrease of $677.28 for every $100,000.

A business assessed at $500,000, for example, will pay $228.15 more in 2017, while light industry assessed at $500,000 would pay $3,386.40 less than in 2016.

Forty-six properties within city boundaries are classified as Light Industry while 676 are classified as Business and Other.

Late last year, Gerald Clancy, owner of Valid Manufacturing, came to council to ask that municipal tax rates be made more equitable. He said if he was going to choose a home for his company today, he wouldn’t choose Salmon Arm but would opt instead for Spallumcheen. One of the reasons, he said, is the light industry rate and business tax rates are nearly the same.

While the city can’t change the classifications for businesses and industries – only BC Assessment can, the city can change the tax rate.

At council’s Monday, April 10 meeting, Coun. Alan Harrison, who had been absent for the March 27 input meeting as well as the April 3 planning meeting where the topic was again discussed, suggested phasing in the new rates over three years.

“Making it affordable so businesses would be able to plan for it.”

However, he wasn’t able to sway the others’ opinions who had already considered the option.

Coun. Chad Eliason pointed to a letter from Doug MacMillan. MacMillan referred to a property owner in the industrial park who saw his classification from BC Assessment changed to Light Industry. That gave him a 29 per cent tax increase.

Eliason said a tax increase from a classification change could inflict far more damage than a rate change.

“It’s the arbitrary assessment from BC Assessment we’re trying to avoid. And 24 other municipalities in B.C. have already done it,” he said of levelling the rates.

Coun. Louise Wallace Richmond said if the Bandaid is pulled off slowly (as in three-year phasing), then the Light Industry classification would be higher for that much longer, slowing the impact on retention and attraction.

“You can’t put a partial Bandaid on something that needs to be fixed and needs to heal.”

Harrison said he thinks if a business is coming here, it doesn’t happen overnight, and the business would find out what’s planned regarding taxation.

Coun. Ken Jamieson said if council phases the change in over three years, it could be saddling a new council with a decision it might not want to do.

Both Eliason and Harrison brought up the importance of looking at Class 4, industrial, in the future. With just one business – Canoe Forest Products – in that category, Harrison noted, “it’s an important employer in town.”

Council agreed.



Martha Wickett

About the Author: Martha Wickett

came to Salmon Arm in May of 2004 to work at the Observer. I was looking for a change from the hustle and bustle of the Lower Mainland, where I had spent more than a decade working in community newspapers.
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