Penticton scraps shift to commercial tax rate

Penticton council abandons plan to lower the commercial tax rate that would have carried a $7 annual cost to the average homeowner

Penticton homeowners won’t be seeing a rise in their property taxes this year, and they may have a clerical error to thank.

At their regular meeting Monday, Penticton city council voted not to endorse a recommendation from the Fiscal Review Advisory Committee that would have seen some of the tax burden shifted from commercial properties onto residential, lowering the multiple used to calculate commercial taxes from 1.76 times the residential tax rate to 1.5 over the course of five years.

That recommendation was included when chief financial officer Doug Leahy introduced the 2013 tax rates bylaw for its first three readings at the April 15 council meeting. However, Ted Wiltse, a sharp-eyed council observer, spotted that council had never endorsed it.

“That discussion never took place. It just got missed by staff and the recommendation was never debated,” said chief financial officer Doug Leahy, explaining that the recommendation was introduced at the Jan. 7 in-camera meeting, and referred to the Jan. 21 regular meeting to be debated and voted on in public.

City manager Annette Antoniak said the recommendation should have been introduced at a public meeting, not in camera.

“It should have been and we have corrected that. All those minutes, going back to 2012, will be put on the website,” said Antoniak. “Anything that is deemed to be the ‘three L’s’ — legal, land, labour — will be redacted, but everything else will be posted on the website.”

“We have probably the lowest rates for taxation for commercial properties in B.C.,” said Coun. John Vassilaki. “For us to take that little bit of a load off them and put it on residential, which is primarily seniors on fixed incomes, I really have a problem with that.”

Though the overall amount of taxes collected wouldn’t change, Leahy admitted that residential property owners would have paid more. An average homeowner, he said, would have paid $7 more this year plus similar increases as the commercial rate was phased down.

By the end of the five years, property owners would have been paying $681,000 more in city taxes. With an extended time to think about the proposition, the majority of city councillors found themselves opposed to the shift.

“The proposal is a little too extreme. I understand the desire to help business, but it is not going to make a very large impact on small businesses that need the help, it’s going to be a help for those large corporations that have large pieces of property,” said Coun. Wes Hopkin.

Couns. Andrew Jakubeit and Helena Konanz were the only two votes in favour of the tax shift. She felt that the city should continue to focus on business.

“If we support business in the community, everyone wins, we need to be better than other communities,” she said.

Acting mayor Garry Litke agreed with the desire to not overburden residential property owners, and said he felt the city had already made a promise they needed to follow through on.

“We have promised a zero per cent tax increase to the residential homeowners of this community,” said Litke. “To change this on them would not be fair. I feel for their economic situation, we have been handing them some electrical rate increases, we didn’t have a choice of passing on that cost.”

With Coun. Judy Sentes, Hopkin, Vassilaki and Litke opposed, the plan to shift the tax multiplier failed. An amended version of the tax rate bylaw was given third reading and a special council meeting was scheduled for Thursday morning to pass the bylaw in time for the provincial deadline.