File photo. (Alison Sandstrom/paNOW Staff)

By Alison Sandstrom

Economy matters

Prince Albert considers tax increase for businesses assessed at over $5 million

Apr 15, 2020 | 2:00 PM

The Prince Albert Chamber of Commerce isn’t happy with a proposed tax increase for big businesses being considered by city council.

While the increase would only affect 16 of the largest commercial properties in the city, Chamber CEO Elise Hildebrandt told paNOW the trickledown effect will be significant.

“People think ‘Oh well it’s all OK because it’s corporate that’s paying it,’” she said. “But we the small businesses rent from corporate, so we’ll still end up paying it.”

City administration is recommending the tax increase to cover lost revenues from property assessment appeals and resulting tax adjustments. Twelve of the city’s largest businesses are currently appealing their property assessments in an effort to get partial refunds on their taxes.

“We had to create a different way to get the revenues,” City Manager Jim Toye told council during a meeting on April 8.

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“This has been done in other cities and this a way to recoup the amount of loss that we’d get if we just did things traditionally.”

The solution being proposed involves dividing businesses into five categories and raising taxes on the three categories valued over $5 million. While all businesses will see the 2.9 per cent mill rate increase approved during 2020 budget deliberations, those over $5 million will see an additional increase. That means a business valued at $5 million, at the top of the second tier, would pay $2,715 more in taxes than it did in 2019, while a business valued at $5,000,001, at the bottom of the third tier, would see an approximate $3,200 increase. The annual taxes of a business assessed at $10 million would go up by around $13,000.

In total there are 21 businesses with assessed values of over $5 million in Prince Albert. Five of those are owned by the government and therefore are non-taxable.

“There’s only 21 of these here and they’re the very largest corporations in our community,” Coun. Don Cody told the meeting. “I would say close to every one of them have gone to appeals since 2017. They’re taking us to the cleaners.”

While all councillors supported the proposed tax increase, some wanted to hold off on passing the bylaw until administration could provide a breakdown of its financial implications in real dollar terms.

“I just need to be comfortable going back to our business community and saying ‘This is what that percentage increase means for you,’” Coun. Ted Zurakowski said during the meeting.

The city’s politicians are expected to give the proposed increase final approval at their next council meeting on April 27.

Meanwhile Hildebrandt plans to submit an official letter voicing the Chamber of Commerce’s disapproval.

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alison.sandstrom@jpbg.ca

On Twitter: @alisandstrom