© Times-Herald photo by Lisa Goudy
Bert Olson, chair of the economic development commission’s investment attraction sub-committee, speaks about the new tax incentives program to council at the Feb. 24, 2014 meeting. The program was approved in a vote of 4-3.
New and expanding businesses will be able to take advantage of a tax incentive.
“The goals were actually to send a clear signal that Moose Jaw is competitive and open to business,” said Bert Olson, chair of the economic development commission’s investment attraction sub-committee. “It would attract investment for new companies. It would be a factor to consider for increasing your existing business and … to demonstrate a strong gain in the tax base over time and it should not be at the expense of the existing city revenues.”
After heated discussions, the majority of council approved the economic development commission’s recommendation to approve the tax incentive program at Monday’s council meeting.
Olson said the building permit process would serve as the “kick-start application of the program application” and the value of the improvement is the value for the tax incentive. SAMA would assess the value of the project as a third party.
For instance, he said if a $500,000-property is increased in value by $100,000, the $100,000 is subject to the tax incentive. The tax exemption is 100 per cent in the first year, 80 per cent in the second, 60 per cent in the third, 40 per cent in the fourth year and 20 per cent in the fifth year.
“At the end of the fifth year, they would be paying 100 per cent on the whole $600,000 on the property, if you follow my example,” said Olson.
Mayor Deb Higgins said she supported the program.
“I think Moose Jaw does need to remain competitive. There’s lots of opportunity out there and lots of interest in the City of Moose Jaw,” she said. “So we need to be on our toes and be ready to accept the interest that is coming our way.”
However, Coun. Brian Swanson said the tax incentive program is a “really bad idea.”
In January’s building permit report, Superstore and TD Canada Trust took out the two largest permits for renovations. Swanson said if those had been under the program, those renovations “undertaken for strictly business purposes would not be taxed for the equivalent of three years.”
The Civic Centre Plaza project, which is overdue, would benefit the most from the program, said Swanson.
“The idea that we provide tax incentives to banks or multinational grocery stores or even ice cream stores is ridiculous … (It) is a sign of complete desperation, a throwing up of the hands, that we’re open for business. Well I challenge you: Name me one community that doesn’t say it’s open for business,” said Swanson.
“It’s a cliché and just like we’ve heard for 20 years in Moose Jaw how wonderful everything is, how great everything is, to implement something like this is the admission that that’s all a lie, that it’s not so great in Moose Jaw.”
Coun. Dawn Luhning agreed with everything Swanson said.
“If one particular business is in competition with another one … (and) only one of them can do an expansion, they’re going to get a tax exemption? (It’s an) unlevel playing field,” she said. “I have never been in favour of offering an unlevel playing field to businesses because in my opinion, as a city we are open for business period.”
Coun. Candis Kirkpatrick compared the program to a TV sale at Sears.
“Sears would never put their TVs on sale if they had to worry about the person who bought theirs three months before for $900 and they put it on sale for $700,” she said. “We can’t prevent having programs because someone else can’t come forward and take advantage of it.”
Coun. Patrick Boyle added that Saskatoon is the fastest growing city in Canada and they have a similar program called the business development incentive policy. The policy includes a section likened to the tax incentive program.
In Saskatoon, it offers 100 per cent on the first year, 80 per cent on the second year, 70 per cent on year three, 60 per cent on the fourth year and 50 per cent in the fifth year
“Ours is actually in the last year 30 per cent lower than what the City of Saskatoon is offering,” said Boyle. “If the fastest growing city in Canada is using this growth policy, we need to look at something like that.”
The tax incentive program was approved in a vote of 4-3 with Higgins, Kirkpatrick, Boyle and Coun. Heather Eby in favour and Swanson, Luhning and Coun. Don Mitchell opposed.
Follow Lisa Goudy on Twitter @lisagoudy.