Editorial: Tax breaks should be based on need

by LAURA KEIL, Publisher

At the Aug 8th Valemount Council meeting, Council considered yearly tax exemptions for several local non-profits that own buildings in Valemount. These include a 100% exemption for the churches and the two senior housing complexes and a 75% exemption for the Legion, the Lions, the Curling Club, and the Valemount Area Recreation Development Association (VARDA). The total taxes that must be picked up by the rest of the community totals roughly $31,300.

In previous years, the Village waived some expenses for VARDA which occupied a Village-owned building. Last year VARDA moved into their own building on Main St. and have applied for a 75% exemption – or a savings to them of roughly $2400.
Two Councillors had questions about the tax break.

Counc. Hollie Blanchette noted the non-profit has $99,000 in reserves this year and Counc. Sandy Salt noted VARDA had retained earnings from previous years of nearly $300,000.

“We have a lot of seniors that don’t have that, and for the taxpayers to be expected to pay taxes for VARDA I think is unfair,” said Counc. Blanchette.

The organization gets the bulk of its revenue from snowmobile trail passes, along with grants for specific projects.

Counc. Owen Torgerson said the organization is responsible for the upkeep of bridges, roads and trails that could fail at any time. He also noted the huge influx of commerce the non-profit helps facilitate through snowmobiling and mountain biking.

Counc. Hollie Blanchette voted with Salt against immediately approving the tax exemption and Mayor Jeannette Townsend didn’t elect to break the tie vote (Counc. Torgerson and Reimer voted to approve it). Council agreed to collect more information before making a decision.

The Permissive Tax Exemption Policy guides council’s decision in awarding tax breaks.

Though Council has full discretion to award exemptions, breaking a long-time exemption is no doubt political.

The policy itself talks a lot about community benefit provided by the organization as a rationale for the exemption and it doesn’t mention “need” as a criteria.

This is strange but when it was written it’s likely the author didn’t foresee a situation where a non-profit would have such a huge yearly surplus and large retained earnings.

If the only criteria is providing “community benefit,” it is unlikely Council will ever deny a tax exemption. Clearly VARDA – as well as these other non-profits – contribute to the vibrancy of the community and serve local residents.

But is it fair to ask residents to subsidize a non-profit that is flush with cash? Are the profits from snowmobile passes on surrounding lands not in fact the spoils of the whole community?

While it’s not my wish for non-profits to be poor, I do find it hard to defend a tax exemption for a group that clearly has no need for it. With more than 300,000 sitting in the bank, VARDA can no doubt afford a $2400 tax bill.

Perhaps it’s time Council depoliticize tax exemptions and base their policy not just on community benefit, but on need.