Tax breaks for businesses are an interesting idea, say local politicians

Municipal leaders caution tax breaks must be fair for all

Offering property tax breaks in hopes of luring new investment would have to be approached cautiously, say municipal politicians.

Red Deer Coun. Tanya Handley said she likes that municipalities could be given more flexibility on tax issues. However, revenue lost to tax breaks likely means it must be found elsewhere in city budgets.

“I wouldn’t want to see the burden of that unfairly shift to another tax class or building type,” she said, adding that any changes must be fair to all.

The provincial government has introduced legislation that would give municipalities more flexibility to cut tax deals with businesses as an investment incentive.

Under current law, municipal councils’ hands are largely tied when it comes to tax forgiveness.

A bill introduced by Municipal Affairs Minister Kaycee Madu would allow municipalities to offer multi-year — up to 15-year — exemptions, deferrals or reductions on non-residential properties.

Handley said council will have to take a close look at what the province intends and what the implications might be for municipalities.

“I think it would be a very interesting conversation to have on what incentives, if any, that we might use in Red Deer.

“I think when businesses do well, communities do well.”

Blackfalds Mayor Richard Poole also believes communities would have to weigh tax incentives carefully.

“We have to be very careful when we’re putting out initiatives, that we’re not penalizing our existing businesses,” said Poole.

Poole said municipalities are awaiting more details, and the implications would have to be looked at closely.

“Were going to have to get together with our economic development and planning department and really see what type of effect that’s going to have in our community,” he said.

“Municipalities are always looking for ways to increase our revenues, and attracting businesses is one of the big parts of increasing revenue,” he said.

Poole said a significant project is being developed on the south end of the city.

“The developers have been investing there quite considerably. If there is something we can do to help those investments, and for that development to move ahead, we might look at it.

“But it’s always a very delicate task, because we have a lot of really great businesses in Blackfalds. Are we penalizing their businesses by providing incentives?”

Answering those sorts of questions will take careful review before going ahead with any incentives, he said.

The NDP Opposition were quick to condemn the government’s initiative as an “empty jobs plan that does nothing to help municipalities.”

NDP municipal affairs critic Joe Ceci said the bill does little but reinforce powers that municipalities already have. Meanwhile, talks have stalled on new funding agreements for municipalities, he says.

The Alberta Urban Municipalities Association says in a message to its members that it appreciates the government’s effort to give municipalities more options to attract investment, although it offers a caution.

“When considering property tax incentives, municipal leaders must be vigilant in how they apply them to ensure all local ratepayers are treated equitably.”

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