Tax holiday in boom time? Council votes to withdraw exemption to Oceanfront

 

WITH the exception of Doug Race, Squamish council has voted against a bylaw that would give tax exemptions to the Squamish Oceanfront project for 10 year. The exemptions, councillors argue, were given to ensure parity between the Oceanfront, downtown and the business park. But as the tax exemptions for both downtown and the business park expire, councillors say the tax exemptions to the Oceanfront also need to go. The bylaw, however, has yet to be repealed officially and the topic will come up again for discussion soon.

Mayor Patricia Heintzman said the Oceanfront tax exemption was intended to create a level playing field with the downtown and if tax exemptions were no longer available to downtown and business, they shouldn’t be available to Oceanfront either. “If we get rid of the downtown one, then we get rid of the Oceanfront one. We put RTE (Revitalisation Tax Exemption) at the time when things were flat and we were trying to stimulate the downtown. We were trying to stimulate the business park very strategically,” she said. 

Coun. Susan Chapelle said businesses didn’t get into business knowing they would not have to pay taxes. “This isn’t benefitting businesses but actually taxing our other businesses and it isn’t creating playing field for other business. We are in the driver’s seat right now when it comes to land use and we need to be able to pay for our infrastructure,” she said.

The RTE bylaw was passed in 2013 to exempt from taxes new construction or renovations of existing building in downtown and the business park for three years. The bylaw aimed to encourage investment in new commercial, mixed use and industrial space. To create a level playing field, the council also extended the bylaw to the Squamish Oceanfront for 10 years. Council voted to remove the tax exemptions for the Oceanfront, after being informed the bylaw for both downtown and Business Park had expired in August 2016.

At a later meeting, the topic came up for discussion again and Race voted against repealing of tax exemptions for the Oceanfront. “I spent a year on the negotiating team and it was a constant item discussed in the negotiation and we settled on 10 years. The ink is barely dry on the cheque and we are going to pull out. There may be objections to the RTE route but we passed that bylaw. It was all part of the closing deal just a few months back and then to take it away is completely wrong headed. What that shows people is that collectively we can’t be trusted. That is the wrong thing for council to do so I can’t support this,” he said.  

Coun. Jason Blackman-Wulff disagreed with Race and said the bylaw eroded the town’s tax base and was provided so there wasn’t any unfair competitive advantage between the downtown and the Oceanfront land. “I’ve never been a fan of the erosion of the tax base, and I do recall holding my nose and voting for it. We did that so there won’t be any unfair competitive advantage between the downtown and the Oceanfront land. Giving money in tax breaks, guess what, who pays for that, you and me, the home owners. If the development is not viable, because there is no more tax exemption, they really need to revise their business plan because it’s a very small margin. You want to do this when there is no growth happening and that is not the case. With respect to the property owners of SODC and reopening agreement, I have no problem doing that,” he said.

Coun. Race said he didn’t agree that tax exemptions were given to achieve parity between downtown and the Oceanfront. “With respect to the argument that we did it because of parity with downtown, I don’t think we created that expectation and I just don’t accept that. If indeed that was our intent, that was the expectation, then we wouldn’t have passed a bylaw for 10 years, or five years but would have a bylaw that would have corresponded to downtown. I get the fact that this is a boom time, but the Oceanfront is a new area and a start-up area,” he said.

Mayor Heintzman said the RTE bylaw for Oceanfront would expire in 2026 and the council was thinking of repealing the bylaw so it was in line with what was being offered downtown. “Instead of looking at an RTE bylaw focussed on a particular area, council may contemplate being more targeted to work to incentivize certain specific sectors or a particular anchor tenant,” she said.

The Oceanfront development agreement does not explicitly contemplate a tax exemption for the lands, but is rather a standalone bylaw. There have been seven projects that have received the tax exemptions so far, six in the business park and one in downtown Squamish.