Town offers tax incentive for commercial construction

March 27, 2017 7:45 am
Kevin Weedmark

The town of Moosomin is offering tax incentives for new commercial construction for the next three years.

Effective with building permits filed on or after April 1, new commercial building construction, and additions to commercial buildings with a building permit value of $150,000 or more, will have all property taxes cancelled for the first year the building is complete.

The idea was first brought up at council by economic development committee co-chairs Ron Fisk and Jason Miller in January, but the vote was tabled to a meeting when all councillors could be present.
At Wednesday’s meeting there was a 40 minute discussion before the tax incentive came to a vote.

“I don’t think it’s the be all and end all,” said Councillor Chris Davidson. “But it’s one more tool in the chest of tools. Location is key, and a good community to live in, and education, and health care, and access to transportation, which we have. It would be one more tool in the chest.”

“It is one more tool,” agreed Councillor Jason Miller. “It’s low risk. It’s not a cost, we’re just foregoing the revenue for one year. It’s an exemption, it’s not a subsidy. It’s easy on cash flow because there’s no money changing hands.”

He pointed out that the RM of Moosomin already has an incentive program. “Having a different playbook than the RM is a problem. We should be on a level playing field with them.”

There were a lot of arguments made on both sides of the issue. “When you throw this net in the water to try to catch that one fish, you’re catching a lot of fish that aren’t asking for anything,” said Councillor Murray Gray. “A lot of people who never came and said they want their taxes free for a year are going to get their taxes free for a year.”

Councillor Ron Fisk said he believes the tax incentive will be a valuable tool for attracting businesses. He spoke about a tour he recently gave a business owner considering setting up a location in town. “When he was here, the first thing I did was show him everything we have to offer, which included our education, the hospital and showed him all the areas we do have for expansion, and the services we have,” said Fisk.

“I couldn’t offer a tax incentive because we didn’t have one,” he said.

“But what if I called him and said ‘we need you here and here’s something that shows you how much we want you here.’ ”

In the past, the town has sometimes made deals on land prices or provided infrastructure to attract development.

“We look back at the one-offs that we’ve done, and it’s something different for everybody,” said Councillor Jason Miller. “This would be fair to everybody. And it’s easy on cash flow because there’s no money changing hands. The only new money is when that thing is operating in year two. If we look at different options for helping them out, like infrastructure, that money has to come out of our pocket.”

Councillor Ron Fisk said that if an investor comes in the town has the option of making deals on land or offering to provide some infrastructure, “or do you have a platform that’s already approved and we can say ‘to get you to town, this is what we’re doing, and we’ll do the same for the next guy,’ ” said Fisk.

“It’s definitely got to be consistent,” said Councillor Chris Davidson. “If we do this it will definitely be consistent.”

Murray Gray said he spoke to some business owners about the incentive and found many are opposed. “In making a decision like this it’s better to see what everyone thinks about it rather than read it in the paper on Monday,” he said. “It’s a big decision.”

Councillor Teddi Taylor suggested that the tax abatement be introduced for a limited time of three years. “One or two years wouldn’t be long enough to be effective,” she said.

Councillor Garry Towler read out an email from a business owner who said “Just reading the paper. Wanted to say I think the tax incentive is a good idea. I like the $150,000 minimum. It’s kind of saying if you invest in Moosomin, we’ll invest in you. I know other businesses in Moosomin including myself asked if this was available when we bought, and it wasn’t, but it’s good to see the progressive thinking. Keep up the good work, guys. Ideas like this will bring more businesses, more employment, and hopefully higher paying jobs to Moosomin. If that happens the spinoff will be awesome.”

The tax incentive for the next three years passed by a vote of 4-3, with Councillors Jason Miller, Ron Fisk, Teddi Taylor and Chris Davidson in favor, and Mayor Larry Tomlinson and Councillors Murray Gray and Garry Towler opposed.

Once the motion passed, Councillor Murray Gray, who had been the most vocal opponent of the move, said he would try to make it work.

“I’m glad we had a good discussion,” he said. “I was opposed to it, but if council is for it, then I will help make it work.”

“I really appreciate that,” said Councillor Ron Fisk.