Council’s effort at tax relief well intentioned but mild
City's effort at tax well intentioned but mild
In mid-January, the Red Deer & District Chamber of Commerce wrote to City Council advocating for a multi-year tax deferral and repayment program for business disproportionately effected by COVID health restrictions. This was followed up with discussions with the Mayor, City Manager, and other senior members of administration.
To give additional context as to the importance of this measure, here are some comments made by speakers at our webinars. Professor Jack Mintz, Chair of Alberta’s Economic Recovery Council and the University of Calgary School of Public Policy identified the high cost of property taxes as a major impediment to business attraction, the economic recovery and long-term growth. ATB Chief Economist Todd Hirsch outlined how it will take several years for our economy to fully recover.
City administration put forward a recommendation to reduce the interest penalty on outstanding tax amounts for all rate payers. The proposal would have seen the penalty decreased from 14% to 7% in 2021, 10% for 2022, 12% for 2023 and go back to 14% for 2024. As noted in the agenda packet, the regular interest charged on outstanding property bills is 14% and the reduction in interest charged will “cost” the city approximately $570,000 over the three years.
Contrast this to the City of Calgary where Council voted unanimously in favour of reducing penalties to 3.5% for unpaid taxes through 2021 and zero penalties through 2022. They also unanimously voted in favour of directing administration to evaluate the use of tax deferral powers for businesses and non-profits significantly impaired by COVID. Red Deer County, which also received the same letter asking for deferrals reduced their tax penalty to 4% for 2021 and did not increase taxes.
On the bright side the City of Red Deer passed their operating budgets with a zero percent increase - a long-time ask of the Red Deer & District Chamber of Commerce.
Win on Patios
Within minutes of the province announcing we’d revert back to phase 1 with a new set of rules that would once again ban indoor dining and only allow takeout and service on patios, the wheels were in motion to ease the ability for businesses to obtain the permits required.
Initiated by industry and followed-through with conversations between the Chamber and senior members of city administration, changes were made to reduce the permit time from 5 days to near-instantaneous. This change is a tangible and clear support for businesses struggling to adapt and survive health restrictions and a big win for the business community.