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Penticton  

Biz taxes getting too low?

Penticton city council will consider making increases to its business tax multiplier during 2018 budget talks later this month.

The business tax multiplier is the rate businesses are charged compared to homeowners.

In 2015, council launched a four-year process to gradually drop the multiplier down to 1.5 in an attempt to attract new business to the city. Last year, council paused that scheme and left the multiplier at 1.58; the sixth lowest in the province.

In advance of budget talks next week, city staff have again recommended the multiplier stay flat at the minimum, with options also presented for an increase.

Chief Financial Officer Jim Bauer pointed out that property taxes are “just one factor that impede business.”

“There are probably lots of other things that we should be doing that are going to help them be successful and grow, as opposed to just the property tax they are faced with paying,” he added.

Bauer added that the city needs to be mindful of who exactly they are competing against. The average business tax multiplier in the Okanagan is 2.3, while the Canadian Federation of Independent Business recommend setting it no higher than 2.0.

Improvements to the city’s extraordinarily busy business licensing and development services departments are planned.

“If we don’t have nice streamlined processes for somebody to do business in the city, they might get frustrated and go somewhere else,” he said. "The taxes are the least of their worries.”

Under the city’s proposed three per cent tax bump, homeowners would see a $13 increase per $100,000 property value. Businesses would have a $20.54 annual jump.

But if the city were to slide the business tax multiplayer up to 1.8, that residential property tax hit would shrink to $5.64 with businesses paying an extra $105.47.

Bauer noted that any changes to the multiplier would have to be done incrementally. 

The city is holding three public input sessions Nov. 22 to 25 for residents to view the draft 2018 budget and offer opinions. Council budget talks take place Nov. 28 to 30.



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