Council gives 315 non-essential businesses one-time tax credit of $500

City council will spend $157,500 to help 315 businesses that may have fallen through the cracks and haven’t been able to access provincial or federal coronavirus-related financial support programs.

City hall reviewed a list of more than 2,000 businesses and determined 315 would qualify based on their average monthly property taxes, explained Jim Dixon, economic development officer. These businesses fall into A and B business licence categories, have been most affected by the current situation, and have been deemed non-essential.

These 315 businesses would be eligible for a one-time property tax credit of $500. The tax credit would primarily target those businesses that own or rent their property and pay property taxes. The surplus reserve account — which contains $1.4 million — would fund this initiative, while the credit could only be applied to the outstanding municipal taxes.

Not every business owns its building, so this is where business owners could fall through the cracks, city manager Jim Puffalt said during city council’s regular meeting on May 11. If businesses operate downtown, their landlord might not take advantage of federal lease programs and they wouldn’t receive relief.

“We need some discretion to look at those examples that don’t fit any programs,” he added, so as long as they fit the “broad philosophies” that city hall is after, then city administration would want discretion to distribute the funding. This means businesses should apply for funding by Aug. 30.

Some businesses have been left out since the Downtown Moose Jaw Association Inc. has said some business owners are confused about whether they qualify for programs, said Coun. Dawn Luhning. Approving this financial measure would be a vote of confidence from council to indicate it believes businesses deserve help. While Coun. Heather Eby agreed with helping the business community, she didn’t like this idea since she thought council was developing a program “on the fly” and thought they could finish with a mess. Giving a business that makes $450,000 a year a $500 one-time grant wouldn’t make a difference to its bottom line. “These are the businesses that get hit up to support minor hockey and volleyball and (out-of-town) trips. Maybe it is the right thing to do to support these businesses in this time,” she added. “I don’t think it will be a cakewalk for city administration to administer this and figure it out. But I think it’s more the gesture than the dollars that’s key.”

An important question to ponder is how council plans to support residential property owners, since many families risk losing their homes during the pandemic, said Coun. Chris Warren. He wondered if this proposed program could be fair and equitable in light of the difficulties just to define its parameters.

City council has already reduced services to save money, eliminated this year’s tax increase, and deferred projects, all of which will help residents and commercial owners, he added. He leaned toward relying on those initiatives instead of this project.

Unlike other communities, Moose Jaw can provide relief since it has a surplus, said Mayor Fraser Tolmie. Council should want to save businesses now instead of watching them close and then attempting to attract new ones. This initiative sees the full community give support to these smaller businesses.

The program confused Coun. Brian Swanson, since he thought city administration’s report was unclear in whether a business had to own its building fully, be the primary owner, or simply lease the space. He didn’t think council should spend taxpayers’ money on this or get involved in other businesses’ business.

“It’s too loosey-goosey … ,” he said. “We are best to leave those (support programs) to senior levels of government. It’s hard for us to pick winners and losers.” Luhning chastised her colleagues who were against the idea, saying it’s something they should do to help “a little bit.”

Council then voted 4-3 to give a one-time payment of $500 to the 315 identified businesses, with the accumulated surplus to fund the project. Tolmie, Eby, Froese and Luhning were in favour, while Swanson, McMann and Warren were opposed.