With just one final opportunity for public comment on the City of Prince Rupert Budget process to come next Monday, Senior City staff introduced a familiar theme for budget time to the discussion last week, with CFO Corinne Bomben making note of how the City of Prince Rupert views the burdens of the BC Port Tax.
It's a topic that has been part of the narrative for a number of years now, with the City often noting of its frustration with the provincial tax instrument and how they view it provides challenges for the city when it comes to local industrial taxation in funding important needs for the community.
Ms. Bomben made note of how the City views the impact of the legislation on the city as part of her presentation for Council at the March 28th session.
"In 2004 the province enacted their provincial incentive program called the Port Property Tax Act, it sets out a maximum mill rate charged to port terminals. Each year the assessed value of these terminals decrease, a decreasing assessment multiplied by the capped mill rate, means less tax collected year over year.
What this means is budget deficits like the one experienced this year cannot be shared with the four qualifying port terminals. The full cost of the deficit is passed on to all remaining taxpayers. This happens every year, unless these facilities reinvest, at which point the decline begins again on the new tax received.
This also means Capital renewal programs for General City services such as roads, recreation, parks, Fire and RCMP are not contributed to by these port terminals.
The restrictions the city has in sharing the burden of taxation is all due to the province's legislation that prevents council from adjusting all city mill rates. We have been advocating for change yearly and continue to do so -- CFO Corinne Bomben outlining how the city views the impact of the Provincial Port Investment Tax at the March 28th Council Session
 |
| DP World's Fairview Terminal one of many shipping terminals on Port of Prince Rupert property in the Prince Rupert area |
To gain some perspective from the Port's view when it comes to the implications from the Port Tax, the North Coast Review contacted Katherine Voigt, the Manager of Corporate Communities for the Prince Rupert Port Authority for some background as to how they see the Act at work.
BC's Port Property Tax Act was introduced in 2005 to unlock private sector investment into specific trade-related terminal developments by limiting excessively high property tax rates that municipal governments could apply to those terminals.
In Prince Rupert, this legislation has played a role in realizing more than $1 billion of terminal-specific investment in Prince Rupert since its implementation. This investment has resulted in the positive impact of almost tripling local port-related property tax revenues during that time despite the limit on tax rates.
Ms. Voigt also made note of the financial benefit that the investment has had for the Prince Rupert area and how it has contributed to local municipal need.
In 2021, local municipal government revenues from port properties totalled over $12 million, providing a strong industrial tax base that has contributed significantly to local infrastructure revitalization.
With over $2 billion of capital investment under current consideration in Prince Rupert, competitiveness for international investment continues to be critical to Prince Rupert's economic future.
Also noted by the City's CFO was the City's frustrations with the Provincial government when it comes to the implementation of the BC Port Property Tax Act.
The North Coast Review has made inquiries of North Coast MLA Jennifer Rice related to the concerns noted by the City, as well as for the Provincial overview of the Property Tax Act, but has yet to receive any reply or comment towards the issue.
You can review more on the City's Budget preparation from the city website which features more background material to provide an overview of the challenges for the City's elected officials to consider.
As well through the Rupert Talks portal, more Budget information is available including the opportunity for residents to craft their own budget with an online feature called the Budget Simulation Tool, that lets you adjust the ingredients to your perfect budget.
The final opportunity for public comment on the 2022 Budget comes Monday night as part of the City Council session, following that the CFO and her staff will then put together the final draft for the 2022 Financial plan and civic budget, which Council will be asked to approve later this Spring.
More notes on the Budget process can be explored here.
Past City Council Discussion themes can be reviewed here.
The flaw in the City's ongoing bleating is buried in this comment: "This happens every year, unless these facilities reinvest, at which point the decline begins again". What is skipped over is that revenues increase when there is reinvestment, and the fact is that huge amounts of money have been invested in Port facilities, and it has been paying off, for workers, local businesses, and not least of all for the City's tax base over the longer term, as Ms Voigt points out in response to NCR's query.
ReplyDeleteThe caps prevent the City from having a free hand to charge whatever it wants, or defines as "fair", which would discourage investment, and ultimately tax revenue, by creating business uncertainty.