FORT ST. JOHN, B.C. – The City of Fort St. John is eliminating its property tax exemptions for non-profit groups that own land and buildings in 2022. However, there are still ways to offset that cost through grants-in-aid and the newly-developed North Peace Community Foundation.

Council approved the Permissive Property Tax Exemption Council Policy in June 2020. Starting in 2021, the City made changes to the Permissive Tax criteria that would be gradually phased in, allowing organizations and groups time to prepare.

In 2021, groups paid 50 per cent of their non-municipal property taxes, and in 2022 they’ll be expected to pay 100 per cent of the non-municipal property tax.

According to the City, permissive tax exemptions are meant “to balance the social benefits that not-for-profit organizations add to the quality of life in the community with the acknowledgment that all property owners must contribute towards services that the City provides.”

City CFO, David Joy, says in 2019, the City compared its permissive tax exemptions to 13 other cities of similar size.

“We were the second highest at providing not only permissive tax exemptions but grants,” said Joy. “It was getting up to $1.4 million, if not higher in some previous years, and the average of the other municipalities was only $500,000.”

Council recognized the benefit of the non-profit organizations, but it was getting hard to accommodate every group, says Joy.

“Over time, it’s hard for Council to say no when the delegation comes before Council. Every not-for-profit provides a significant social benefit to the community, and Council recognizes that, and we want to reward that.”

The Community Foundation is designed to take over supporting local charities, providing grant-in-aid and tax exemptions.

“We are transitioning all these permissive tax exemptions to grants-in-aid, and we’re transitioning the grants-in-aid to the Community Foundation that the City is trying to establish. This Community Foundation will be the one to award the not-for-profits the money they would need to perhaps cover 100 per cent of their municipal and non-municipal taxes.”

Joy added that the City is trying to be fair to the other property owners in the city that have to pick up the tab of the exemptions.

“With permissive tax exemptions, what happens is the property owners, the residential property owners, the commercial businesses and light industry, they have to pick up that extra amount of tax. When we add in the grants-in-aid and permissive tax exemptions, it increases the tax bill for the residential property owners by $80 a year, or $610 a year for commercial businesses, or $1,423 for light industry.”

Joy says the 2019 and 2020 budgets show small deficits.

“Our budget is as clean and tight as possible, and we have to be responsible with these permissive tax exemptions. And yes, for the not-for-profits, we recognize the benefits. This is where the rubber meets the road this year because we are ceasing to exempt 100 per cent of this non-municipal portion. But this was a policy that Council approved a year and a half, two years ago.”

Joy says he’ll be presenting the operating budget to council in the coming weeks.

“If there’s a tax increase, and it’s more than one or two per cent, the public gets upset. They expect us not to have any tax revenue increase.”

Joy says the City will continue to do all it can to support non-profits.

“Over the next two, three years, we’ll be giving the Community Foundation $1.4 million to cover what we currently do in grants-in-aid and permissive tax exemption until the Community Foundation has enough in its endowment funds to serve the non-profits. So we’re doing all we can from our side, and it’s not saving us necessarily all that much money.

The City collects revenue for other organizations as part of the annual property tax bill, including the Province of BC – School Tax, Hospital, Peace River Regional District, Municipal Finance Authority, BC Assessment Authority and BC Transit.

Taxes collected on behalf of the Province of BC are considered the non-municipal portion of taxes. These include the Province of BC – School Tax and the Peace River Regional District.

Council meets on December 13th.