Minister of Municipal Affairs Kaycee Madu announces expanded property tax incentives for municipalities. (Municipal Affairs)

By rdnewsNOW staff

New Business Incentives

City, Chamber applaud new property tax incentives for municipalities

Nov 30, 2019 | 9:00 AM

The City of Red Deer and Red Deer and District Chamber of Commerce are applauding the province’s plan to expand property tax incentives given to municipalities this year.

On Wednesday, Municipal Affairs Minister Kaycee Madu announced new legislation that’s been tabled to further empower municipalities to offer property tax incentives to business owners, by also including machinery and equipment.

In June, the government introduced and subsequently passed Bill 7, the Municipal Government (Property Tax Incentives) Amendment Act, which enables municipalities to offer multi-year property tax incentives to non-residential properties for up to 15 years.

If passed, the new Municipal Government (Machinery and Equipment Tax Incentives) Amendment Act, 2019 would expand on those powers, to also apply to both machinery and equipment as well.

Officials say the proposed new bill would provide municipalities with the immediate flexibility needed to implement programs that encourage both investment, and business and industry to operate in their communities.

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Reg Warkentin, policy and advocacy manager at Red Deer and District Chamber of Commerce notes that although Red Deer doesn’t have a machinery and equipment tax, Red Deer County does.

“It could potentially be utilized by them to attract certain types of industry or give a break to those who are struggling, or just provide that little bit of incentive to get businesses that may be on the cusp, over the finish line.”

Warkentin feels Bill 7 is a fantastic program for Alberta.

“We have been in discussions with officials at the City to encourage its utilization to really focus on competitiveness and get the business-sector booming in the city,” adds Warkentin. “It has the potential to enhance competitiveness of business in our ability to attract and retain, whether we want to target specific industries or areas of the city. It’s just such a well-designed piece of legislation that could be utilized in a number of ways.”

Warkentin points to Red Deer’s Edgar Industrial Park as a location that could benefit from Bill 7.

“You look at some of the vacancy rates up at Edgar Industrial, there’s massive potential to utilize the Bill and provide some serious and much-needed incentives to increase the number of businesses in our city.”

Mayor Tara Veer reiterates that Red Deer doesn’t have machinery and equipment taxes, in hopes of keeping the City business friendly.

“In terms of Bill 7 in general and using tax-deferrals as an option to revitalize under-used development sites in the future, council has already given direction to City administration to find some ways of doing that,” explains Veer. “So we will see some use of Bill 7 in the New Year. But as far as the amendments that have been tabled, we’ve chosen not to have machinery and equipment tax in order to stay business-friendly.”

Veer says the new amendments tabled, apply mostly to new developments.

“For example, there’s an under-utilized site or a derelict site that’s been dormant for many years, it’s in the public interest for those sites to be developed because then they contribute to the tax base on the whole and it actually helps keep tax rates down for everybody else.”

“So by deferring tax say for the first couple of years, for example a new business start-up,” continues Veer. “It helps create an economic climate for a new business start-up, and eventually you would have new business contributing to the tax base. But obviously you want to keep those programs short term, because you want to be fair and equitable to all of the existing businesses that exist within the city as well.”