A request from the Canalta Ponoka Hotel to have their property taxes reduced by 10 per cent led to a lengthy discussion on the ongoing COVID-19 crisis during town council’s regular meeting held via Zoom on June 22.
The reduction would amount to $4,684.54 if approved.
“This is not normal. This is not regular times,” said Mayor Rick Bonnett.
“This is not a business that normally comes begging — they’re usually doing well this time of year.”
Administration advised council to vote against the tax reduction for a number of reasons. Council ultimately tabled the item for a later date.
The business inquired back in April about what tax relief options the town had in place. Later in May, when the town had approved its tax relief options, it notified Canalta, but they did not respond with an answer.
Administration also pointed out that the business debates its property assessment every year.
Coun. Kevin Ferguson questioned whether any other municipalities have granted any businesses with a 10 per cent tax reduction.
Coun. Ted Dillon, stated that the town had already assessed what was best for Ponoka, providing its two different tax relief options, so it didn’t matter what anybody else was doing.
Coun. Clayton Nelson agreed it was a waste of time and effort to look into it further when it wasn’t likely the town would approve the tax break anyway.
“We’ve done what we think is right for this community and I stand by that,” said Nelson.
“A little extra information never hurts,” Ferguson said in response.
Mayor Rick Bonnett expressed some frustration that the structure and stipulations of the Municipal Government Act (MGA) doesn’t allow municipalities to charge anyone over the base tax rate, if their business is doing extremely well or if their business is something council feels is unfit for the community, but only allows them to give tax breaks at their discretion.
“Again, we see through this COVID business that some businesses are doing very well and some businesses are devastated,” said Bonnett.
“We need more flexibility as municipalities to be able to do what we need to for our tax base and our citizens rather than worrying about what’s written in a book.”
Industries hit particularly hard are hotels, airlines, restaurants, transportation and tourism, he says.
“This is where the MGA, basically, takes all the power,” he said.
“We’ve got businesses that could pay up a lot more tax for some of these other businesses now that are devastated through no fault of their own.
“It’s not like they’ve gone bankrupt or they’ve done anything that’s caused a problem. They got shut down by the federal and provincial governments of this world and the public health limitations that they’ve thrown on us … this is where it really angers me.”
Bonnett went on to say that he feels the provincial and federal governments should be responsible for helping out businesses rather than municipalities, but the supports being offered aren’t enough.
“They don’t need a wage subsidy — they have no income. When you have no revenue, it doesn’t mean nothing,” he said.
“So I get our frustration and our need for our revenue, but you’ve got to look at this picture from this business’s side. They have absolutely nothing in every town that they’re dealing with.”
Ferguson brought up the issue of setting a precedent.
“That kind of scares me in a way, in terms of where do we go from there, and we’ve got programs already in place,” said Ferguson.
Coun. Teri Underhill suggested they look into making a plan for hotels, restaurants and other affected businesses, such as giving them a 10 per cent tax break on the condition that those businesses then give a 10 per cent donation to service groups in town that are losing out due to the cancellation of the Stampede.
The donation would then be a tax write-off for those businesses.
“I think we have a lot of thinking to do on this. I don’t think it can be a one-off, to be honest,” said Underhill.
“The reality is, our service groups are going to need money,” she said.
“To me, I hope we can find some kind of answer that helps everybody.”
General manager of corporate services Sandra Lund answered that it’s possible to do different tax rates for different classes of assessments, but special assessment rates have to be done across the board.
“My understanding is … you can’t pick and choose. I’d have to see which properties are in that class of assessment,” said Lund.
Lund added that adjusting tax rates would also mean the town’s budget would need to be adjusted, and it could result in the loss being spread out over the rest of the tax base, or the town needing to reduce services to compensate.
Bonnett says there are a number of things the town may need to look at for solutions that they normally wouldn’t feel comfortable with.
“We need to find some middle ground we can all live with,” he said.
A motion to table the item, to give council more time to consider the matter, and for administration to do some research, was carried.
ENMAX contract renewal
Council voted to renew the contract for regulated rate option services with ENMAX Energy Corporation for a one-year term.
Counsellors Sandra Lyon and Carla Prediger were absent for the meeting.