The City of Prince Rupert passed its recommended 1.5 per cent increase to the mill rate for 2017 and its budget for the same year, but not before a lengthy appeal to the public from council as to why the city seems to continually find itself in dire straits every budget season.
Implementing its property tax increase this year and increasing taxes every year except for 2016, Mayor Lee Brain made sure the public knew just exactly why residents are on the hook for such high tax rates, and what the city is trying to do to make sure that ends as soon as possible.
“We’re in a situation where we’re losing $1.2 million a year due to the Ports Property Tax Act, which caps all marine export industries’ taxes,” Brain said during the April 24 meeting where the budget was passed. “And because of the fact that we have to transfer 20 per cent of the revenue from Ridley Island to Port Edward [through the Ridley Island Tax Sharing Agreement].”
While councillors previously said they hesitated to raise taxes in prior council sessions, five of the six councillors approved the increase, with Coun. Gurvinder Randhawa the only one voting against the budget.
“We’ve already increased five per cent on recreation fees this year, three per cent on utility fees, and for people on fixed income, their income does not increase accordingly,” he said. “It’s already passed, but we should think about that. It is too much for our community.”
Council rejected a further increase in an April recommendation from staff to the tune of 2.25 per cent, due to unpredictable weather using up the city’s snow and ice removal budget in March, set aside for use this coming November and December.
“Municipal property taxes only raise 26 per cent of our revenue and user fees are another 26 per cent, and the dividend we’ve taken from Prince Rupert Legacy is 12 per cent. Once we use that Legacy funding up on doing infrastructure works, then we are going to be having great difficulties again funding any kind of infrastructure work,” said Coun. Joy Thorkelson.
“We need to be able to run this municipality having those companies who are counting on their workers living in their community and accessing our services to be paying their fair share.”
In the crosshairs for mayor and council were the Province of B.C. and the District of Port Edward and current agreements with both on taxation.
Between [the Ports Property Tax Act and the Ridley Island Tax Sharing Agreement], we are $1.2 million out and growing,” said Brain. “It’s severely handcuffing this community’s ability to move forward and we are not able to get on top of our finances the way we should because of those agreements.”
The mayor explained that through inflation and depreciation of port export terminals that qualify for the capped tax rate, once imposed to encourage investment in B.C., but now not keeping pace with asset depreciation, approximately $500,000 needs to be topped up, even after a $1.6 million Ports Competitive Tax Grant that is distributed to the city yearly by the province to make up for the capped tax rate on industry.
“In 2008, the container facility paid nearly $795,000 in taxes and this year, they’re paying about $500,000-ish, so they’ve decreased their taxes by 28 per cent since 2008 … There are two solutions here. Either the province gives us a bigger top-up, continues to keep up with inflation every year, keeps giving us the grant and increasing it significantly each year, or the cap itself gets restructured in some way,” said the mayor, continuing that even with millions of dollars in port investments this past year, the city saw only $15,000 in revenue increases versus the year before.
The city has gotten the province’s ear, but the capped tax agreement impacts more municipalities than just Rupert, so a solution will “take some time.”
As for the Ridley Island Tax Sharing Agreement with the District of Port Edward, Brain would like to see the District paid through impacts benefits agreements with major industrial companies like those on Ridley Island, instead of having Rupert taxpayers contribute their money.
“We should be able to collect the taxes off of Ridley Island and if Port Edward feels they’re impacted by RTI (Ridley Terminals Inc.), then RTI should most likely pay for the impacts on Port Ed themselves so it doesn’t come out of our tax system,” Brain said.
The city and the district will see their current two-year agreement end over Ridley Island, one that pays Prince Rupert $500,000 from Port Ed over 2016 and 2017.
But the mayor wants to see more.
Citing the fact that surrounding communities pay the City of Terrace to use its services, Brain would like to see the same in Rupert, with Port Ed residents paying into shared services like the airport ferry, library, museum, landfill capital costs and arts centre.
A user fee increase of 45 per cent was implemented to non-Rupert residents to use the landfill in 2015, but the mayor added that upgrades to the landfill are all done on Rupert’s taxpayers’ dime.
The district also returns three per cent of its 20 per cent share of Ridley Island taxation to Prince Rupert to pay for recreation services.
“They believe their taxes are their taxes, but they also believe our taxes are their taxes and that’s the fundamental thing that needs to change … We’re not upset or angry about it, I just believe in fairness and this is about Prince Rupert’s fair share.”
Port Edward Mayor Dave MacDonald said on April 25 that no negotiations have taken place over a new agreement recently.
“That was a two-year agreement, so really nothing has been spoken of since that time,” MacDonald said. “We’re not wanting to see a new agreement. We like what we have now and the discussion will go forward. Right now, we’re just moving along but we have no intention of giving up. We’ll talk when the time comes. It’s a benefit to both communities and I don’t see why it should change.”