City Throws Lifeline To Small Businesses (Copy)

It wasn’t unanimous but the City of Moose Jaw is about to throw a financial lifeline to local small business the question to be asked is it a rope or is it just a thread in the COVID - 19 storm?

At Monday evening's regular meeting of Council a divided group of elected officials decided in a four to three vote to proceed with a business assistance plan.

The plan will see the City give a one-time property tax rebate of $500 to either commercial landlords or business owners for businesses who were forced to closed under the Province's declared State Of Emergency.

“It's more so it should be based upon need we cannot afford a universal grant in the city. It’s just something not affordable,” city manager Jim Puffalt told Council.

Under terms of the program the City is giving a one-time commercial property tax rebate for businesses who are class A and B business license holders and have gross sales of less than $500,000 annually.

The City program would allow businesses whose landlords have declined to apply under the Canada Emergency Commercial Rent Assistance (CECRA) program to access the local rebate.

Under the City's program the landlord must pass the tax rebate back to his tenant as a means of reducing rent costs. Business owners whose landlords will not do this will receive a cheque directly from the City.

“We do not want to provide funding to the property tax owner who is not going to share it with the business,” Puffalt said.

Business who own their own place of business, who have Class A or B business licenses and are not tenants, would qualify for the City's property tax rebate program.

The City's program would not apply to transient and home occupations.

After looking into how to set up the program Administration was able to establish approximately 315 businesses - out of over 2,000 businesses - who could potentially qualify for the program.

Under CECRA business property landlords must apply to take part. CECRA sees the federal government paying 50 percent, landlords contributing 25 percent and business tenants paying 25 percent of the commercial rents in April, May and June.

Further Reading - CECRA program website

The $500 amount the City is offering to rebate is based upon an average of $500 paid monthly in property taxes.

“The benefits, eligibility, how to apply, application documents and support information will be required to be developed. City Administration would recommend that any applicant would require acknowledgement of approval of Federal and/or Provincial funding support to be eligible for Municipal support,” the report to Council stated.

“There are a number of businesses under no fault of their own were forced to be closed and to soften the blow the thought from Council was trying to give them a hand,” Puffalt said.

He said the City would strive to ensure any business applying could maintain confidentiality.

“We don’t want to be looking through a business's financial reports to see how much money they have lost over the last year or so or compared to a year ago.”

If all of the 315 businesses targeted took part in the program it would cost approximately $157,000 with the funds coming from the Accumulated Surplus Account.

It should be noted Council previously decided to use the Accumulated Surplus to cover the $337,500 in tax assessment losses lost under successful property tax appeals. The previous policy was to assess a surcharge to all commercial property owners and have them pay for assessment losses in the commercial property class.

The move was at the time portrayed as one time event and a different solution would have to be found in future budgets.

“I think it’s important we do something to show our support and do something for our business community…it is a time of crisis and this is a good effort to support the business community,” economic development officer Jim Dixon said.

THE DISCUSSION

Despite Council agreeing to look at the possibility of establishing a business assistance program in April support for the proposed program was split.

Councillor Dawn Luhning, who also sits as the City's representative on the Downtown Business Association, said the program was needed.

“I do believe there are a number of businesses that have fallen through the cracks,” Councillor Luhning said, adding “it’s just a vote of confidence from us they need this one time solution.”

Councillor Crystal Froese, who unsuccessfully ran against Councillor Luhning to be the City's rep on the Downtown Business Association, echoed the support.

Councillor Heather Eby questioned whether or not to support the initiative as the $500 amount was small and perhaps not large enough to make a big difference for most vulnerable businesses.

“I certainly agree our business community needs to know we support them…I think we are going to make a bit of a mess,” Councillor Eby said.

Councillor Chris Warren also questioned the proposed policy as not practical.

“I just think it creates some confusion…we have done what other municipalities have done and maybe more,” Councillor Warren said going on to state the measures would impact the 2021 Budget.

Mayor Fraser Tolmie supported the program because it helped keep businesses here already which was easier than trying to encourage new business to set up later.

“Not every community would be able to do this. We have a bit of a surplus to pay for this…it should be a community shared plan…this is a time the community can look after these smaller businesses in their time of need,” Mayor Tolmie said.

“These are businesses who get hit up to support minor hockey, athletics and trips all of the time so maybe it's good to support them,” he said.

Councillor Brian Swanson opposed the program typifying it as too “loosey goosey” in its structure.

“We are better not to get involved in this. I don’t think $500 is going to break any business,” Councillor Swanson said.

“We are better to leave this to senior levels of government. It’s not up to us to pick winners or losers,” h said.

Councillor Scott McMann questioned the fairness and whether the City should be involved in an assistance program.

“To me anytime any level of government gets involved in assistance where does the fairness come in?” Councillor McMann asked. “I just don't think this is our role. The federal and provincial governments have the coffers to support…I really don't think it’s fair or our role.”

In the end the program was approved with Councillors Luhning, Froese, Eby and Mayor Tolmie in favour. Councillors Swanson, McMann and Warren opposed the program.

Administration will now work out eligibility criteria, application and process with a target date to apply later this Summer.

SEE RELATED - Chamber Says Property Tax Rebate Appreciated