Town of Cardston Council is currently drafting a tax-exemption bylaw to “encourage redevelopment and new development of non-residential properties within the Town” (Draft Bylaw 1695). Chief Administrative Officer Jeff Shaw sheds light on Cardston’s decision in a recent interview with The Temple City Star. “Prior to 2019 the legislation was written to only allow deferral or cancelation of taxes,” he states “and only if it was equitable”. On release of Bill 7 in 2019, Kaycee Madu, who was the Minister of Municipal Affairs, stated that the new bill would “allow municipalities… to offer a wide range of property tax incentives for non-residential properties for the purposes of attracting and retaining economic development.” Shaw says that at first, there was a general feeling around the council table to be cautious and observe how the bill would be applied across the province, rather than being the first community to dive in. Lucky for them, other municipalities in the province were willing to go first, and Cardston has been able to model their draft bylaw after the Town of Edson’s. Other tax incentive bylaws initiated by municipalities in the region last year include Cardston County and the Town of Fort Macleod. Though each of the bylaws were created for a similar purpose, they look different in both the requirements of the applicants and the incentive offered by the municipality.
Cardston’s draft bylaw requires that a business’s investment (addition, expansion or renovation) increase the property value by at least 25%. This differs from Fort Macleod’s bylaw which requires a minimum $50, 000 investment into the property, and also from Cardston County’s bylaw which uses a variable incentive that decreases the taxation percentage as the investment by the business into the property increases. Cardston’s draft also reflects Edson’s choice to not require an application fee, which differs from Cardston County which requires a $500 fee, and Fort Macleod which requires a $100 fee.
The incentive offered by each municipality is unique. Cardston’s draft bylaw offers a reduction of taxes over the first five years. This starts with a 100% reduction in taxes for the first year, which declines by 20% with each consecutive year. Edson’s bylaw reduces taxes by 100% for the first two years, and decreases the reduction by 25% each year for three more years. Fort Macleod’s bylaw offers a 100% reduction for the first year, with the reduction decreasing by 25% for the following two years. Cardston County, however, offer the same incentive each year for four years based on the investment
Any bylaw draft presented to council requires three readings before coming into effect. This means the council looks at the draft, makes any amendments they see fit, and votes with a majority in favour of the bylaw a total of three times. The first reading of the Non-residential Property Tax Incentive Bylaw in Cardston was moved by Councillor Bengry on November 10th, and passed unanimously. During this meeting council asked administration to get feedback on the draft bylaw from both the Economic Development committee and the Chamber of Commerce. The second reading was moved by Councillor Selk on February 23rd and, again, was passed unanimously. Conversation at the more recent meeting involved recommendations that had been received in discussions with a legal representative. Questions the council is still considering before passing the bylaw include whether or not the tax reduction would begin upon approval of the application, on commencement of construction, or completion of construction. Most other municipalities seem to be requiring that improvements be completed before the tax exemption begins, whereas Cardston’s lawyer advised that a business may be more motivated to initiate development if the tax exemption comes into effect when the application is approved.
Shaw says that the town hopes this tax reprise will allow business owners doing new builds “to be able to focus on the financing of a new space… during those initial construction years. Also, existing businesses will be enabled to “turn over low assessment properties sitting idle into newer more modern structures, and allow them to get cash flowing before they have to face the full tax burden”. Pandemic timing could be ideal for this bylaw introduction as many businesses are focusing on renovations while their doors have to remain closed anyways. If businesses start construction now, they will have tax relief over the next five years as the economy starts to boom again and the vaccine allows for more community interaction and local spending.
Council will likely debate further on the draft later in March and the bylaw could be in effect by April. So, if your business could use a facelift this spring, keep an eye out for the opportunity to get a break from your taxes and focus on the bricks and mortar.
Elizabeth Thompson, Local Journalism Initiative Reporter, Temple City Star