Council stopped short of giving Hinton’s tax incentive bylaw all three readings and plans for more public consultation prior to the bylaw coming back to council on Oct. 5.
The tax incentive bylaw would allow new industrial and commercial developments or expansions to be rebated the municipal property taxes over a five year term.
Coun. Ryan Maguhn pointed at the current local and global economic realities and the fact that other municipalities have employed tax incentives when he explained that the Town of Hinton needs this incentive to become more economically attractive in terms of development and to not fall behind.
“I would like to see council support this so we can offer a community where it not only makes sense to do business here but that it is financially desirable and that a new business would be crazy to do business anywhere else,” he said during the Sept. 7 regular council meeting.
Not only does this incentive attract new business to the community but also creates opportunities for current businesses to expand, Coun. Trevor Haas added.
Mayor Marcel Michaels acknowledged former Mayor Rob Mackin who initially brought this discussion forward in 2014 or 2015.
The five-year program allows 100 per cent tax exemptions in the first two years, followed by 75 per cent in year three, 50 per cent in year four, and 25 per cent in year five. According to the bylaw, the exemption would start the year after completion of a renovation or expansion.
Eligible applicants must invest to expand, improve, renovate, or revitalize their property resulting in an increased assessment value by at least 25 per cent by the end of year two from when the development permit was issued.
Initially, the exemptions would only be available to businesses that received their development permit after the bylaw is set to come into effect, but council discussed this again at the Sept. 14 meeting and decided to allow all businesses that received a permit in 2021 to be eligible.
Acting CAO, Haworth noted that each calendar year, development permit holders are eligible to apply before Dec. 31 for the tax exemption program.
“While I would not normally advise council to create bylaws that are retroactive, there’s merit in exploring that in this case because of the nature of it and what the intent was. As well as the people and the businesses that were waiting in the que hoping this would impact them, but they also did not want to hold off on a development permit until October to do that and lose their build season,” Howarth said.
She noted that the Town would not lose money that has already been collected.
“I feel this is an important step for our community to drive progress,” said Coun. Albert Ostashek.
“This tax incentive program isn’t actually costing the town any revenue, it’s deferring future revenue for further down the road, but the tradeoff is that we are incentivizing development and by incentivising that development we are going to get future tax revenue that without this incentivisation we may not have seen. This might be the thing that pushes people who are sitting on the fence to go and take advantage of that and do the development they’re thinking about,” he added.
This issue will come back to council at the Oct. 5 regular council meeting.
The tax exemption is also only applied on the new development or expansion, not the existing property, added Scott Kovatch, Hinton’s economic development officer.
Masha Scheele, Local Journalism Initiative Reporter, The Hinton Voice