Quesnel council has approved an approach to tax shifting that moves the City’s reliance away from industry and gives light industry a bit of a break. Barkerville Brewing Co. is one example of a company that pays light industry taxes in Quesnel. (Observer file photo)

Quesnel Council agrees to tax shift that gives light industry a break

The shift means residences will see a tax increase of about $3 per $100,000 each year

Quesnel council reiterated its desire to shift the tax burden away from industry this week and decided on an approach that will give light industry a bit of a tax break.

At the Feb. 18 meeting, council agreed that it continues to view tax shifting as a strategic direction for the city, shifting the tax base between the various assessment classes to reduce its reliance on major industry.

After much discussion, council agreed on an approach that will see the light industry tax rate set to the commercial rate, which will offer a bit of a reprieve to light industry and see increases to the commercial and residential tax rates, while keeping the major industry tax rate as is.

This will see the tax for major industry stay the same over the next there years, while the light industry class will see a decrease of $1,240 per $100,000 in assessment over the next three years (starting in 2020). Commercial taxpayers will see an increase of $34 per $100,000 over the next three years, or roughly $11 per $100,000 each year, and residential taxpayers will see an increase of almost $9 per $100,000 over the next three years, or roughly $3 per $100,000 per year.

Mayor Bob Simpson says council took “a hard look” at tax shifting in the last budget framework.

“The history of the City of Quesnel has been an aspiration to tax shift but a nominal actual action on tax shift, and the reason tax shifting is an issue is because at its peak, the City was getting north of about 70 per cent at its very height from its industrial tax base and residents were paying only 18, 19 per cent of the total tax bill,” he said. “Previous councils, especially when the mountain pine beetle epidemic hit, had sort of looked at that and in the budget reports saw that as a great vulnerability and set an aspirational goal that if possible, they would start weaning themselves off of the industrial taxation because of the vulnerability.”

The City’s Financial Sustainability and Audit Committee (FSAC) has had pretty substantive debate about what could tax shifting look like but didn’t have any consensus, according to Simpson, adding the traditional approach has been to look at shifting tax away from industry.

Simpson says the main light industry here is United Concrete, C and C Wood Products, Barkerville Brewing Co. and some of West Fraser’s operations.

“The other piece is it’s the most likely target for economic expansion,” he said of light industry.

There was no question around council that the City needs to shift taxes in some way, but the debate was around where to make that shift and how quickly that change should happen.

“I think it’s incumbent upon us to engage in some form of tax shifting to properly deal with the vulnerability we have with our industrial rate payers,” said Coun. Mitch Vik. “As our economy and our community transitions, I’m not an expert, but my feeling is there still may be more to come, so I think the sooner we sort of re-balance things and shift some of that burden to residential, I think that’s just prudent. So the bottom half of that question is who bears the burden entirely? This has caused some struggle and some good debate at FSAC.”

Vik was in favour of shifting the burden more to residential so that commercial taxpayers aren’t taking a hit.

“The commercial tax rates have definitely crept up to an area where I feel it’s going to affect our competitiveness as we move forward, and where I really struggle with that is in a community where we may depend on commercial to bear some of the economic burden as we transition our community, if we make mistakes now in terms of the taxation, we may thwart growth in that commercial development,” he said.

To Coun. Ron Paull, it seems that council has been slowly shifting away from major industry to the rest of the tax base, and he felt it was a good idea to look more closely at light industry because he thinks that is where future investment will take place.

“I don’t feel that we’ve paid a lot of attention in recent years to light industrial, and for me, there’s not a whole lot of difference between light industrial and commercial, therefore I would be in favour of the option to align light industry with commercial,” he said.

Paull made a motion to set the light industrial rate to the commercial rate over a three-year period, without adding increases to the major industrial class. Vik was opposed, but in general, councillors felt spreading the shift over several years was more palatable.

“I don’t like seeing a hit on anybody, I really don’t, but I don’t want to backwards on where we’ve been with major industry,” said Coun. Scott Elliott. “I understand the points on the light industry and bringing it in and trying to make it attractive, and I think it’s valuable. If something goes wrong with C and C or some of these other major employers, we’re going to be in a heck of a lot of trouble. I don’t want to see any kind of a shift going anywhere, but I would have to lean towards this option as well, the residential and commercial, but parsed out over the three years, I think it’s feasible as an option.”

READ MORE: Quesnel council proposing 6.7-per-cent tax increase for 2020



editor@quesnelobserver.com

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