By: Korie Marshall
Our municipal property taxes pay for the stuff in our communities, all the services we share like streets, plowing, utilities, and public areas. Sometimes there is provincial and federal money available for certain projects, but we can’t count on those dollars each year. Each Council and Board needs to sit down each year and draw up a budget – they have to look at what was spent in the past, what needs to be done in the future, and make decisions that will affect what they do in the next five years (even though their terms aren’t that long). And it is not like a personal bank account, where they can just decide to throw some extra money on this bill, and let that bill wait.
There are rules about how taxes can be collected, and what they can be spent on. What we are charged for certain services, like water and sewer, can only go towards those services, but other pools of money can be used for different things. Every year, governments have to pass bylaws about how they plan to spend money, what they have budgeted for, who gets tax breaks. It can be a tedious process, and a boring read, but that is how we see the real priorities of our governments, if we can take the time to figure it out and look at the big picture.
Everyone wants lower taxes, but they also want more services and more stuff. If their taxes go up, they want to know why, and it’s not always an easy answer, because there is so much that can change. If your property value goes up, when everyone else’s in your municipality stays the same, then you’ll pay more taxes and everyone else will pay less. That is good for everyone else, but not good for you. Municipalities decide on a long term budgets, and then have to make choices about setting tax rates based on property values that are always changing – it’s a lot of moving targets.
The BC Chamber of Commerce has called on municipal candidates to talk tax before this election. It wants local politicians to support small businesses by committing to spending restraint to lower the general tax burden, and committing to a low business tax multiplier – the measure of the additional tax burden that businesses pay beyond the residential rate.
The BC Chamber represents 125 local Chambers, and its president, John Winter, says that local governments have a “tremendous opportunity to create business-friendly communities that foster jobs for everyone.” He says there are some communities where small businesses pay four of five times what the same sized residential property would pay.
“It’s well known that businesses don’t use anywhere near this proportion of municipal services,” Winter said in a recent press release. “These high tax burdens on small businesses aren’t just unfair – they’re untenable.”
But lowering taxes in any one area generally means one of two things – either someone else pays more, or services get cut. It’s a fine line to balance the right decision. I don’t know if it is right to charge businesses more for everything, because I’m sure there’s a point where it’s just not worth being in business. But I see the temptation – they are making money (at least, we assume they are) so we should let them bear more of our tax burden.
Small businesses are extremely important, not only to our communities in the Robson Valley but to the entire province and country, so trying to decide how to tax them is a difficult issue. I think about start-up businesses, people with ideas that they might be able to turn into businesses, small businesses that have existed for years, struggling along with us, or just being there for our communities. Taxing them more just doesn’t seem fair, but where else will the money come from?
Contrast those small and new businesses with what the province wants to do with some big new businesses.
Premier Christy Clark has made promises to British Columbians that her government will support the growth of the burgeoning liquid natural gas industry, and that growth will mean prosperity for British Columbians. So the government has to set a special income tax on LNG, but it has to be a low percentage, so that LNG companies won’t get scared away. I don’t know that much about business taxes, but it seems to me an additional tax on top of whatever else business have to pay might look like extortion, but maybe they just accept that as a cost of doing a certain type of business.
But the province can also offset additional taxes on big businesses by giving them big tax breaks start with. I guess that helps get them interested and willing to set up shop, and then you gradually tax them more (take away the breaks, start charging the extra taxes). Sounds good, and I think it might be an excellent idea for municipalities to adopt. My only worry is that as the businesses start to become profitable, they might not want to pay more tax. They might decide to pick up and go somewhere else where they’ll get a better tax break, because other places are trying to attract them as well.
That looks to me like a whole bunch more moving targets, and still no easy answers. I certainly don’t envy any local municipality that has to make these decisions.
