Questions Asked About Tax Fairness For Homeowners
By Robert Thomas
The issue of tax fairness - where commercial property owners pay higher property taxes than residential property owners for properties with the same assessment - was front row center as Executive Committee set the 2022 mill rate.
Since 2018 Moose Jaw has a policy to slowly reduce the spread in property taxes commercial property owners pay compared to residential property owners, shifting the tax burden to home owners.
With the tax crunch more difficult for many home owners to pay MJ Independent asked a series of questions about the issue and shouldn’t tax fairness also apply to homeowners who may be struggling financially to stay in their homes?
“I think Mr (Brian) Acker (City of Moose Jaw financial director) talked about trying to create fairness by having a balance between commercial and residential and moving gradually to even things out,” Mayor Clive Tolley said.
Earlier in Executive Committee under questioning by Councillor Heather Eby about the commercial versus residential tax rate Acker had replied in a perfect world the tax rate would be equal.
Mayor Tolley said cost of living increases and inflation was impacting both businesses and residents alike.
“Everybody is feeling the pinch these days. The price of everything is going up. The cost of all of the utilities are going up so I'm hoping that people who are in their own homes and don’t have that much disposable income are going to be able to make it. And pay their bills and stay in their homes.”
“We certainly don’t want the cost of owning a home in Moose Jaw to be to the point people have to give up their home,” he said.
The Mayor pointed out Moose Jaw is still viewed as an affordable place to purchase a home.
“When we read the real estate people still tell us Moose Jaw, Saskatchewan is still one of less expensive places to buy a home in this country,” Mayor Tolley said, adding “and when I talk to a lot of our new immigrants they talk about coming to Moose Jaw in particular as they can afford to buy a home here as opposed to the larger centres like Vancouver and Toronto.”
The Mayor went on to say “we know we are even less expensive than Regina or Saskatoon.”
“Comparatively I think we are still doing pretty well but cerrainly I hope people are able to make ends meet.”
Moose Jaw Mayor Clive Tolley - MJ Independent photo
Asked about commercial properties receiving more services versus residential properties for such as snow clearing thereby justifying a higher commercial tax rate Mayor Tolley said services are based upon traffic.
“I think the road cleaning services schedule is based on traffic count. So if you get a lot of cars going by your place I guess we will have to increase the snow removal in your area.”
Asked about the seeming tax shift - increased water fees, garbage collection and recycling fees - are no longer subsidized by property taxes Mayor Tolley said that was not true.
“I don’t think it’s fair to say that everything is shifting over. Mr Acker talked about trying to create balance between the assessment for commercial and residential.”
“Again we want to be able to attract businesses to this community. Business development, economic development which creates jobs so more people can work here and make a living and live here. So it’s a balancing act in terms of creating this fairness you are talking about.”
Regarding seniors, and others living on fixed incomes, and rising property taxes plus increased inflation the Mayor admitted making ends meet is hard. But it could be worse such as other places in Canada.
“It’s difficult Robert (Thomas) I’m not saying it’s not difficult. We can only be thankful we are in Moose Jaw and we are not somewhere else where it is more difficult (financially).”
City Manager Questioned On Issue
Asked why it was important for residential properties share more of the tax burden versus commercial properties City Manager Puffalt said it was a balancing act.
“I think as his Worship said we are trying to find a balance. What has happened in the past is Moose Jaw is not unique in this. Most cities in Saskatchewan have actually had the commercial paying a larger portion of the property tax bill so lots of municipalities have worked that way to trying to reduce that gap between the business (residential) and commercial,” Puffalt said.
“The more activity we have here, the more businesses, the more jobs that are created, the more economic activity, the more property taxes are created. We have seen that work over the last four years to get places like Canadian Tire…that is all that balance we are trying to accomplish,” he said.
Puffalt said many municipalities are working to reduce the property tax gap between commercial and residential properties.
“Everybody is trying to bring that down to a certain level. We have to be aware of the residents’ concerns but also the businesses’ concerns. They can also go to lots of places to create their businesses. So it is important we have that open attractive and welcoming atmosphere…so we encourage to stay and we encourage new business to come.”
Asked by MJ Independent how much consideration was given to other sources of tax relief to commercial property owners have access to which residential property owners do not have access to. The example was given how commercial properties can write off their property taxes federally while residential property owners cannot.
“That is a good point. I cannot speak for every other city or even Moose Jaw as that was before my time but I think that was part of the premise way back when yes some of this can be written off and homeowners can’t but is that the fairest system in the world? And I think cities have said yeah there should be a gap but when it gets too large businesses complain.”
“There is a balance to things and when it gets too much people start complaining.”
Asked if tax arrears had shifted, due to the pandemic, from commercial to more to residential properties Puffalt said he could not answer because he did not have updated information.
“I think that we have had that ongoing discussion, but again I don’t have any of the details with me but again we looked at a number of ways to help everybody. Business wise when it came to the pandemic we stepped forward in a number of ways to give a hand and the same with individual property owners.”
Puffalt pointed to the City doing its best during the pandemic to help out commercial and residential property owners alike.
“We gave them more opportunity to do monthly payments. To get more involved into those programs. When the pandemic hit we worked really hard to help people out.”
Asked about efficiencies or cost savings as a means to ease the overall property tax burden Puffalt said they are something Administration is always looking for.
“We do a very good detailed look at our budgets all of the time…we spend hours going through the budgets and making sure they are justified and detailed and follow our budget philosophy. By the time you get to Council it is pretty well down to what we think we need for the year.”
Come back later for more stories on property taxes