Municipalities now have a way of making their communities more enticing to businesses.
Bill 7, which was implemented by the province on June 28, allows municipalities to provide property tax incentives to businesses and industries that could help them grow attractive investments and new development.
Under the new regulations, a community can opt to offer partial or full tax exemptions for these businesses for up to 15 years.
According to Linda Mortenson, general manager of corporate services for the city, Cold Lake already has their own program in place.
“The city currently has a break policy, which is kind of the same thing, only we have them pay their taxes and we give them a grant back based on our policy,” she told council during their committee meeting on Tuesday, Sept. 17.
She added, since 2011, they have spent $167,000 on the initiative.
Some Alberta communities are uneasy about the new incentive.
“There’s been some municipalities that have mixed reviews on this and feel that it may create an unfair advantage to municipalities that don’t have the capacity to offer these tax incentives, so there’s been that debate,” Mortenson said.
Prior to Bill 7, the province had rules against municipalities exempting property taxes, explained Coun. Chris Vining, which was why the city created their grant program.
“I don’t quite understand this one… If you’re Calgary and Rocky View and Cross Iron Mills hasn’t been built yet, who get’s it?” he asked. “You’re going to have large corporations putting municipalities up against each other.”
Coun. Jurgen Grau agreed.
“You almost don’t have a choice but to do this.”
“I just think it’s another tool in the arsenal that a municipality could have,” Coun. Bob Buckle stated. “Think about the one’s that are suffering. What about a small community that’s sitting next to a big community that wants to try and compete and attract some people so they can build in their community? We’re always thinking about the big guy versus the little one, but think about the little one that doesn’t have any tools to attract any retail businesses close by. Now they have some tools they can put on the table.”
He added, “I don’t think it’s all doom and gloom, I think it cuts many different ways.”
