It’s an idea that’s gaining steam in a number of central Alberta communities: an incentive for new and existing businesses that could amount to low or no tax bills on certain construction for a year.
The idea was floated to Town of Bashaw council Nov. 21 at their regular meeting.
Bashaw Chamber of Commerce representatives Ty Wilson and Dan Zembal appeared before council as a delegation to discuss the idea of a tax incentive that lowers or even eliminates tax bills for new and existing businesses, depending on circumstances.
As the chamber delegates began they described the idea as a tax benefit on improved properties that’s a pilot program running in neighbouring communities that seems like a good idea and is rather new.
The chamber delegates stated they understand how intricate a town’s budget can be but also saw the value in a tax incentive to attract new business or encourage existing businesses to improve their operations, and in return earn a reduction or elimination of their tax bill.
The chamber delegates suggested a three year program that ran in tiers and with certain minimum dollar amounts.
It was noted at the meeting some other communities that offer such an incentive have up to 100 per cent tax rebate on development that meets the program criteria in the first year, and as years go by the rebate shrinks until it eventually disappears.
The chamber delegates stated that having a high rebate early would be useful as most new businesses don’t make money in their first year.
The chamber delegates noted that the provincial government has given municipalities the ability to offer programs like this and pointed out one nearby community, the Town of Stettler, adopted a bylaw offering this incentive.
The chamber delegates stated the Stettler bylaw doesn’t affect the existing tax base but only applies to new developments or improvements.
The chamber delegates stated they see a program like this as something that attracts new business to Bashaw and helps out the Bashaw business community. They stated a bylaw similar to Stettler’s seems the most appropriate for Bashaw and seems easy to administer which shouldn’t increase costs to the town while boosting the tax base.
The chamber delegates stated that Bashaw has a high tax rate and that people seem surprised at just how high it is compared to Red Deer. However, the chamber delegates also added Bashaw has a lot of services that it is proud of.
Town Chief Administrative Officer (CAO) Theresa Fuller stated it would be useful to look at the assessed property values and budgets of communities that adopted this program as compared to Bashaw; she added that Stettler for example is much large than Bashaw.
Fuller also stated existing taxpayers would be shouldering the burden for this program.
All those present then discussed who actually shoulders the burden for tax incentive programs of this kind with the chamber delegates stating since this is only new business or improvements it should have no effect on the town budget while town staff and some councillors stated new business and improved businesses still have an effect on the town and can cause expense which has to be covered by other taxes.
Coun. Bryan Gust seemed hesitant about the idea noting that if a new business pays no taxes in its first year the town staff and the rest of the business community will have to step up help.
The CAO noted the idea seems to suggest different treatment for new businesses compared to existing ones, and stated some existing businesses had a very hard time during the COVID pandemic.
Coun. Cindy Orom suggested contacting other communities who offer this program to get feedback. Before councillors debated the presentation Coun. Orom declared a pecuniary interest and excused herself from the meeting.
Mayor Rob McDonald noted there’s value in both sides of the debate.
“I see both sides of this” said the mayor, adding the town wants to encourage business but also wants to treat everyone fairly.
Coun. Gust mentioned that several large businesses recently changed hands and this program would exclude them. Gust also stated he didn’t think the small rebates offered by this program would make much difference to a business.
Coun. Jackie Northey acknowledged Gusts’ comment, but added that the community may see this program as a way of trying to encourage business.
“I think it’s worth looking at,” said Northey.
Coun. Kyle McIntosh stated he liked the idea but was opposed to any 100 per cent rebate and would vote against that.
Councillors passed a resolution that the CAO investigate tax incentive programs and report back to them at a future meeting.
Local Journalism Initiative reporter