OLDS — Town council has passed a bylaw offering tax breaks for new or expanding businesses that employ at least two full-time personnel.
The tax exemptions start at a one-year/100 per cent tax exemption for new builds or renovations that increased assessed value by $100,000 or more.
At the other end of the spectrum, more than $50 million spent on non-residential properties in town could generate a 100 per cent tax exemption in Year 1 and 2 to a 25 per cent exemption in Year 5.
However, these tax breaks apply only to municipal taxes. Property owners looking to obtain these exemptions will still have to pay seniors’ and school taxes on those properties.
The exemption program is slated to run from Feb. 1 this year until Dec. 31, 2032.
While introducing the bylaw, Brent Williams, the town’s chief administrative officer, said it had been circulated to four or five business groups in town.
Only two responses were received, but he said those replies were “positive” regarding the bylaw.
Debate on the matter lasted for nearly half an hour.
Initially the bylaw, as written by administrative staff, said that in order to obtain the tax exemptions, applicants would have to “commit to employing, on an annual basis, at least five full-time personnel.”
Coun. Dan Daley questioned that figure.
“If you look at a commercial business organization that would start up for $100,000, it would be pretty hard, I find, to have those businesses, those small community businesses, fit into this criteria,” he said.
“I just feel that the full-time equivalent there could be a hinderance to them being eligible for this exemption and that it may stop them from choosing Olds as a community to set up in.”
Williams said that figure is up to town council to determine.
"Five was kind of a common number I’ve seen in other draft bylaws, but if council wishes, it can be zero to four,” he said.
Coun. James Cummings suggested the figure should be zero.
“These numbers are pretty small when you’re talking about businesses,” he said.
Cummings said many small businesses employ only one or two people and it’s even possible to run a business with no employees.
“It would be unrealistic to expect five full-time employees in a business that only costs $100,000 or an increase of five full-time positions with a $100,000 increase in the assessment value of a business,” he said.
As a result, Cummings suggested setting the figure at zero. He went one step further and proposed a motion entirely eliminating the line about staff numbers from the bylaw.
Williams said when the bylaw was first discussed, it was felt “there ought to be some employment value” if tax dollars are to be forgone.
Coun. Darren Wilson said he didn’t support eliminating the line.
“I could live with one full-time employee. Maybe there’s three, but I don’t support deleting it entirely,” he said.
Coun. Wanda Blatz suggested changing the figure to one full-time employee.
“Obviously you’re going to have one full-time employee, no matter what,” she said.
Coun. Heather Ryan suggested requiring two employees.
“More than likely, the reason for expansion is because you see growth there and you’re more than likely will want to hire somebody else to operate. So I’m kind of looking at this as two. I think two full-time employees would be suitable,” she said.
Daley said he too thought two would be a suitable figure.
Although he preferred leaving the figure at zero, after hearing the input from the other councillors, Cummings agreed to amend his motion to call for at least two full-time employees.
Both Daley and Cummings wondered how enforceable the bylaw will be.
In response, Williams said essentially, the application for the tax breaks will be a kind of affidavit, a sworn statement in writing.
“If someone lies to us, the only recourse is to not give them the tax exemption when it’s done, because they’re always generally a year behind,” he said.
