The Town of Bashaw will look more closely at economic development, specifically support of the small business sector, after the local Chamber of Commerce pressed them on a non-residential multi-year tax incentive bylaw.
The discussion was held at the Oct. 18 regular meeting of council.
Councillors heard a presentation from the Bashaw and District Chamber of Commerce, who asked for a response to a presentation they did almost a year ago about introducing a non-residential multi-year tax incentive bylaw.
For reader’s benefit, such a bylaw essentially cuts property tax bills by an agreed-upon amount, sometimes up to 100 per cent, for a certain number of years; the provincial government recently gave municipalities the authority to offer such bylaws which typically require a dollar amount of construction for eligibility.
The Chamber of Commerce was represented by President Stacey Trombley and local business owner Dan Zembal, who also sent councillors a letter outlining the organization’s interest in a tax incentive bylaw and some research they’ve conducted.
“…the council instructed the administration to collect from other municipalities information on how this has benefitted or not benefitted them,” stated the letter.
“The chamber also reached out and contacted a number of nearby communities to assess for themselves in Jan. 2023,” added the chamber letter which noted its research was forwarded to the town office.
The chamber members also wanted to address a concern that was presented at their first appearance, specifically that while some businesses may benefit from the tax incentive bylaw other business may become upset by that.
“The town businesses were approached regarding this issue and it was found the majority were in favour of the bylaw regardless,” stated the chamber letter. Included in the council package were several forms listing signatures from Bashaw businesses who stated they supported a non-residential multi-year tax incentive bylaw “…in an effort to stimulate, revitalize and promote business in Bashaw.”
The chamber representatives noted they preferred the Town of Stettler’s bylaw, which includes a 100 per cent tax waiver the first year for those who qualify.
Also included were comments from other municipalities which have such a bylaw, including City of Wetaskiwin Chief Administrative Officer (CAO) Sue Howard who noted, “It really did not cost us anything other than a little bit of time with the assessment and taxation process, so for each occurrence if it cost us $100 that would be the max.”
Wheatland County Economic Development Officer Jamie Kramble stated, “The way I look at it we are not losing anything by offering an incentive. If an investor chooses not to locate in your municipality, you gain nothing.” Comments from the County of Paintearth and Minburn County echoed those remarks.
Town of Bashaw CAO Theresa Fuller included a memo to councillors listing the benefits and drawbacks of a non-residential multi-year tax incentive bylaw. Fuller stated the benefits included enticing economic development, offering lower taxes to qualifying businesses, standardizing development initiatives and boosting the tax base in the long run.
Drawbacks included a relatively small number of businesses being eligible for the incentive, cutting town revenue for several years, the incentive staying with the business as ownership changes, no data to prove that tax incentives work and encouraging competition between municipalities.
Councillors debated the proposal at length; Coun. Jackie Northey asked the chamber representatives what their ultimate goal with this proposal was. Zembal answered to define Bashaw as a community that is open and welcoming to business.
Zembal stated such a bylaw may not solve all problems, “…but I think it sends a clear message.”
Northey suggested that goal could be accomplished by programs offered through the federal government.
Zembal stated he as a business owner has approached the federal government but hit a wall of bureaucracy and proceeded no further.
Northey suggested the town form an economic development committee to look at ways to promote growth and prosperity in the Bashaw region’s business sector.
Coun. Bryan Gust voiced several concerns with a tax incentive, including that it doesn’t address purchasing an existing business; Gust stated retaining existing business is at least as important as attracting new ones.
Coun. Kyle McIntosh stated he wouldn’t support a bylaw that encourages a “race to the bottom,” as municipalities compete on low taxes. He added his line in the sand would also be a 100 per cent tax break, which he would not support.
Mayor Rob McDonald agreed. During discussion CAO Fuller stated tax incentives such as those proposed would have an effect on the Town of Bashaw’s budget, adding that places like Wetaskiwin and Stettler have much larger tax bases to work from.
Councillors decided through resolution to have staff look into tax incentive bylaws in towns similar in size to Bashaw which will be reported at a future council meeting and for council to hold a planning meeting for an economic development committee before the end of 2023.
By Stu Salkeld, Local Journalism Initiative Reporter
Original Published on Oct 30, 2023 at 08:50