N. Cowichan shifts tax hike to businesses

It took them more than an hour of heartfelt debate April 30 to finally reach a decision but North Cowichan councillors chose to give homeowners a slight tax break – at the expense of the business and industrial taxpayers.

Residential taxpayers are facing an increase of 2.98 per cent in 2015.

The general municipal taxes on a $200,000 home will be $913.18 while on a $300,000 home they will be $13,69.77 and on a $600,000 home, they will be $2,739.54.

However that choice means the business and industrial communities will have to pick up the slack.

And that was the cause of a lot of passionate discussion in the council chambers at the sparsely attended special budget meeting last Thursday evening.

Coun. Kate Marsh led the charge on behalf of the businesses, with support from Coun. Maeve Maguire and Mayor Jon Lefebure but she met stiff opposition from her colleagues Tom Walker, Joyce Behnsen, Rob Douglas and Al Siebring.

They wanted some reasonable respite for the residential taxpayer and waded in with strong arguments when Marsh pointed out the dire state of many small businesses.

At issue was whether or not to distribute a 3.22 per cent municipal tax increase evenly across all classes of properties (Option 1) or to set the residential tax increase at 2.98 per cent and 3.7 per cent on all other classes (Option 2).

Another choice (Option 3) dropped the rate on light industrial and increased all the other classes 3.7 per cent in an effort to make North Cowichan more attractive to light industrial investors. However, no one wanted to talk at length about that now, preferring to address that subject later this year.

They had plenty to discuss even without that, however.

Coun. Joyce Behnsen said she still thought there was half a million dollars in the budget that could be spent more wisely.

She was referring to $420,000 earmarked for a sidewalk along part of Lane Road and $75,000 for another dog park.

"I don’t believe we should be increasing taxes," she said.

Coun. Rob Douglas also backed Option 2, but was ready to listen to municipal staff ‘s concerns about attracting more investment.

"Would it (Option 2) hurt our competitiveness?

I don’t think so. Not for heavy industry anyway. We’d still be third or fourth lowest. And we’re one of the lower business rates on the Island compared to other municipalities. The lion’s share of this will fall on a handful of properties. It’s not ideal, but it’s quite a small amount for most businesses. We need a bigger conversation about light industry. That’s goes beyond tweaks in the tax rate," Douglas said.

Coun. Al Siebring also recognized that helping homeowners would hit industry.

But he reminded council that homeowners had been asked to step up when Catalyst’s mill was in financial trouble only a few years ago.

"This is not a big increase for Catalyst. This is a small way of trying to regain what we gave up to help them," he said.

Coun. Tom Walker said council needed "to show we care about homeowners. Many homeowners are now struggling. We keep talking about the average house but I have trouble finding it."

He suggested that seniors, in particular, are not financially well placed to deal with increases in their taxes, while businesses could write off an increase.

"Choosing Option 2 has a message. It offers hope to homeowners that we’re really concerned about the residential rate. Maeve Maguire was for Option 1, saying she wanted an alternative that gave hope to business, as shown by a public statement by Kathy Wachs before council started their discussion, urging councillors to note that downtown Mural Town was suffering.

Maguire took up their cause. "Certainly Chemainus has come here to speak to us today," she said.

"Option 1 gives a louder message to business. It’s less politically correct but I think it’s the right choice."

Then Coun. Kate Marsh passionately urged her colleagues to choose anything but Option 2. "I feel this is a defining moment for council. We’re in the first year of our term. It’s all about messaging. Who we are as council. We can set the table for business," she said, pointing out that various programs introduced in the past have helped business towards a stronger foundation but that council needed to be ready to capitalize on that work by offering businesses some tax support now.

She said a lot of people are living precarious lives, facing increasing disparity between rich and poor. She called Option 2 "a bit punitive" to business owners. In other words councillors were saying: "just be good sports and suck it up." Behnsen disagreed.

"People are selling their homes and vowing not to live in North Cowichan again. I feel a big responsibility to keep the taxation level down," she said.

Mayor Lefebure reminded everyone that a lot of work had gone into the idea of equally distributing the increase.

"Everybody at this table had really considered this. From my point of view it is an accurate reflection of what we decided. We should support the rate structure that we worked so hard to put in place," he said.

An attempt to pass the equal distribution

rate was defeated 4-3 and when the option to give homeowners a break came up, Marsh again entered the lists.

"When the representatives of businesses send letters saying: please don’t do this, I feel concerned," she said.

Siebring disagreed, saying that the word equitable was important to him, particularly following the tax break given to Catalyst.

"Option 2 is a very small step back towards equity," he said, and his side won by a 4-3 vote.

Before council made its decision, members of the public were asked for comment.

Laurie Thomson said that North Cowichan council should not pretend that their tax rates are low by leaving such things as the levy for the Island Savings Centre out of the equation.

"No one is fooled by those claims," he said.

Don Graham was concerned that the amount of taxes raised on farmland was "miniscule," and wondered if council was distracted by considering farmland a "motherhood" issue.

"How many of North Cowichan’s 450 farms are tax dodges?" he asked, suggesting that municipal staff should be asked to investigate.

Kathy Wachs said she was deeply concerned that council might add to the amount of taxes businesses have to pay, calling it "too much of a burden", especially for some of the hard-pressed small operations in Chemainus.