Council cuts tax break

  • Mar. 15, 2011 2:00 p.m.

By Treena Mielke

A decision by Rimbey town council to eliminate a tax incentive plan which affects more than 100 properties in town, and will generate $133,000 in revenue, has some local businessmen up in arms.

Dale McNaught, who co-owns DMT Tank Truck Service in Rimbey with his wife, Wanda said he was told by a former councillor when he began building a new shop for his trucks which is now almost completed, he would receive the tax break.

“I was told it would be tax free for five years.”

He is confused as to why the tax incentives have been dropped..

“I don’t know why they’re doing this. They still get taxes on the property, just not on the building.”

He would have considered building in the country if he knew the tax incentives weren’t available.

“They should have at least waited until these incentives ran out.”

Wanda McNaught is concerned because the businesses weren’t notified about the proposed change.

“It is just common courtesy. Let us know what you are doing. It affects our pocket book.”

McNaught is also concerned about rising taxes.

“We enjoyed no mill rate increase for at least 10 years. Now, they’re talking about raising the mill rate and taking away tax incentives. Why are they doing this? It seems that they are not open for business. “

“You try and make a community thrive and do what you can. The previous council was very proactive and encouraged new development. They understood that the more people that are in this town the larger the tax base which benefits everyone.”

Dennis Nikirk, from Nikirk Bros Contracting, was able to take advantage of the incentive when he built a new commercial building. “It was one of the things that helped us sway that way.”

He said not having the tax incentive will definitely be taken into consideration when he builds again.

He, too, wishes the business owners could have had some input.

“They didn’t talk to us. At least that would have given us a chance to have some input.”

Contractor Garry Marek said the tax incentives are definitely a drawing card and he believes the practise to be carried out successfully in other municipalities.

“I realize they are just trying to save money, but it might come back to bite them in the end.”

Contractor Steffen Olsen owns some land that he was planning to develop, but the elimination of the tax incentives has caused him to rethink this decision.

“It’s certainly something I will keep in the back of my mind. It makes it a little less attractive.”

Former Mayor Dale Barr said he is disappointed with council’s decision.

“We worked hard to encourage business into our community. This tax incentive bylaw was researched before it was implemented and they have chosen not to reimburse commitments that we made to the business section.”

Information sent to council from lawyers Brownlee LLP states the town may decide to maintain the status quo by leaving the bylaws and policies (governing the tax incentives) in place. However, they advise against this action as it is not advisable for a municipality to maintain invalid bylaws and policies.

However, the law firm states council could proceed to repeal the bylaws and the policy by way of passing a bylaw to that effect and can lawfully continue to provide some tax rebates to property owners.

Brownlee states in the letter such an option may be considered if council is concerned with the political ramifications of cancelling this policy decision of the previous council. This can be done if council annually passes a resolution identifying each property wherein a certain portion of the property taxes would be cancelled.

Such a resolution can only cancel property taxes imposed on any given year and would be at the discretion of the current council. This would be consistent with the Municipal Government Act which states that a municipality may cancel taxes to a particular taxable property.