Taxes are the bane of pretty well everyone's existence.
They can be hard to live with at the best of times, but without them, let's face it — daily life as we know it would not even function. In fact, it would likely grind to a devastating halt, followed by social dysfunction and chaos.
We all like hospitals, emergency responders, schools, roads and other crucial infrastructure like waste disposal services as well as water and wastewater treatment. These of course all rack up rather hefty price tags.
And if a country like Canada with a population of more than 30 million people is struggling to keep up on maintaining its infrastructure on a national level, a small municipality of roughly 3,000 certainly has its work cut out in maintaining services for its residents.
Sundre is a perfectly picturesque gem situated off the beaten path in the foothills, but that alone will not guarantee this community's growth and in turn its long-term sustainability. The location and the potential it presents simply is not enough to alone convince an entrepreneur this is the place to start a new business.
The idea of introducing tax incentives for new businesses or developers has informally been tossed around by council, which has yet to officially address the issue. The Town of Sundre currently has no policy outlining such an approach, but perhaps it should. There are members of council who certainly think so.
“We need to recognize incentives can be very beneficial to us. I don't think it hurts us one little stinking bit to give tax incentives...It is not a financial disaster to do that. In fact, in the long run, it can work out for the best,” said Coun. Myron Thompson during council's Aug. 29 meeting.
The councillor makes a valid point that is worth further discussion.
The amount of tax revenue “lost” over the first year — or depending on how the policy would look perhaps two or three years — that a new business establishes itself will be made up in spades in the long run.
Fairly commonly known in the world of business is that the first five years or so usually make or break a fledgling enterprise, so a tax incentive could help the venture reach a point of sustainability, after which it will be able to pay the regular business tax rate.
How a tax incentive policy would look depends on council and the discussions it has. But there are plenty of potential options, ranging from a single year of waived taxes to fully forgiving taxes for the first year and incrementally increasing the tax rate over a number of years until it reaches the regular established business tax rate.
An entrepreneur who is calculating and weighing out the pros and cons of starting a business will undoubtedly be more inclined to consider the community that is offering him or her temporary tax relief.
That might represent a short-term sacrifice for the municipality, but the long-term payout is worth it.
— Simon Ducatel, editor
