County mulls scrapping vacancy tax rebates
Lambton commercial and industrial property owners could lose vacancy rebate programs
Sarnia-Lambton businesses could lose a municipal property tax rebate program as early as next year.
County finance staff are proposing the elimination of vacancy rebates – once mandated under Section 364 of the Municipal Act – after the province recently gave the green light to municipalities to create their own policies on vacancy rebates.
Under the existing program, all Lambton County commercial and industrial property owners can apply to their municipalities for temporary tax rebates if at least a portion of their property is vacant for at least three months.
Successful property owners can receive between a 30 to 35 per cent tax rebate.
County finance staff, however, are recommending scrapping the vacancy rebate program in an effort to ensure municipalities have predictable and stable funding going forward.
“This is not about trying to penalize someone,” said John Innes, the county’s general manager of finance. “This is not about collecting more taxes.”
County finance staff expect to lay out their plan to local business owners through a public consultation process over the next few months. Staff also plan to meet with the Sarnia-Lambton Chamber of Commerce to explain the proposed change.
Members of county council’s afternoon committee were presented with the plan Wednesday as part of a staff report on 2017 tax policies.
That report also recommended county council not move forward with a reduction to the farmland tax class ratio as requested by the Lambton Federation of Agriculture.
If the county proceeds with eliminating vacancy rebate programs – which could happen effective Jan. 1, 2018 – it would not only impact the county’s program but also the rebate programs of its member municipalities, including Sarnia and Petrolia.
But Innes said business owners could still get tax relief by choosing to appeal their property assessments and/or applying for a tax rebate if they’ve made changes to their property.
This abundance of available tax breaks was one of several concerns Ontario municipalities recently shared with the province during a review of its vacancy rebate policy.
Up until this point, commercial and industrial property owners have been able to apply for a temporary vacancy rebate, as well as appeal their property assessments to secure a permanent tax break, Innes said.
“In essence, you’re giving them a break for the same thing, so municipalities, like Lambton, have argued to the province it should be one or the other,” Innes said.
Point Edward Mayor Bev Hand said her municipal government is struggling with stabilizing its budget because its hotels are seeking municipal tax breaks due to the fact they’re not at 100 per cent occupancy.
“To me, it’s not fair because we’re still giving them services and we’re making our budget based on those tax dollars and then they turn around and appeal and they win,” she said.
St. Clair Township Deputy Mayor Peter Gilliland said the current system allows property owners to “double dip” to get multiple tax breaks that directly impact municipalities.
“They can work us right to the death,” he said.
County council’s afternoon committee on Wednesday endorsed staff plan’s to initiate a public consultation process for the elimination of the vacancy rebate program. It also endorsed keeping 2017 property tax class ratios – except for the landfill class – the same as those set in 2016.
Council as a whole, however, will have the final stay at its May 3 meeting.