Moose Jaw, Sask., business owners call for changes to property assessments

Moose Jaw, Sask., small business owners gathered on Monday to call on city council to intervene after property assessment changes caused what the owners are calling tax unfairness.

Speakers hoped to persuade council to ask for an audit of property assessments in the city.

Bernie Dombowsky, who operates a catering company in the city, was among those who addressed council.

Dombowsky said changes made by the Saskatchewan Assessment Management Agency (SAMA) in 2021 led to an increase in property taxes for small businesses, while larger ones ended up paying a smaller share.

He and others have been asking city council to step in for months.

"We did put a for sale sign on the building and looked for an alternate location in Regina. So that is put on hold until we find out what's happening, because we just won't stay in a city that's not fair. We can weather the storm financially, but we will not stay in a city that's not fair," Dombowsky told CBC on Monday.

Dombowsky has been pushing for changes and organizing events to raise awareness, and narrated a video that was posted to YouTube over the weekend and has more than 8,600 views.

At issue for the small business owners are changes made by SAMA for 2021 that introduced multiple market capitalization rates (cap rates) in Moose Jaw. The lower a business's cap rate is, the more it will pay in property tax.

The change saw some businesses given a lower cap rate, which resulted in a property tax increase, while others got higher cap rates, which resulted in lower taxes. SAMA had one cap rate for all properties from 2017 to 2021.

Dombowsky said the changes resulted in his and other smaller size businesses paying more in taxes and businesses that pay higher rent seeing their tax bill decrease.

"City council is the employer. They hired SAMA as the subcontractor. So the employer should be able to tell the employed subcontractor what the will of the people is and what is right. It's just totally wrong that there's such a disparity between the two groups."

Dombowsky told city council Monday that he and other smaller businesses cannot afford "another year or two of inequitable property taxes, this has to be fixed in the 2023 [tax] roll."

He received an ovation after his remarks were over.

Kristy Van Slyck, with Viridian Property Corporation in Moose Jaw, also spoke at city council Monday, calling for council to push for an audit.

Van Slyck said SAMA uses one or two cap rates in other Saskatchewan cities, but Moose Jaw has more.

She said the city does not need to use SAMA to assess properties and can hire another firm or have the city handle the assessments.

"The people of Moose Jaw deserve fair and equitable taxation and this will only occur when a secondary audit occurs."

CBC reached out to SAMA for comment, but no one was made available to speak on Tuesday.

Council votes to have SAMA look into secondary audit

On Monday, city manager Jim Puffalt recommended that council contact SAMA's quality assurance division "to request a preliminary investigation to determine if there is sufficient cause to complete a secondary audit."

On Monday night, council voted 4-0 in favour of the recommendation.

"As the contract holder, the city had a chance to look at those assessments, and they seem to be counterintuitive and hard to explain," Puffalt told council on Monday.

"[SAMA] should be able to explain to us how they are coming up with those values."

In a letter to council, SAMA's managing director of quality assurance Karlo Simonson said, "the decision to do a secondary audit rests with the SAMA Board based on recommendation from myself."

He said if an audit is done and Moose Jaw disagrees, it can be appealed at the Saskatchewan Municipal Board.

Councillor Heather Eby said attendance in the gallery was the largest it had been during the current council's term.

"This is the biggest issue in Moose Jaw right now, so we appreciate everyone being here."

Eby asked what council can do if the secondary audit is done and does not alleviate the issue, to which someone in the gallery yelled, "Fire SAMA."

Puffalt said said the property owners affected by the assessments "don't have a year to work their way through the process."