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Changes proposed to non-profit tax law in Fort St. John

The city of Fort St. John could change its tax exemption policy so that non-profits and churches would have to pay taxes on vacant land or undeveloped parking lots they own.
Fort St. John Mayor Lori Ackerman spoke about the city’s permissive tax exemption at Monday’s committee of the whole meeting.

The city of Fort St. John could change its tax exemption policy so that non-profits and churches would have to pay taxes on vacant land or undeveloped parking lots they own.

These changes and others were discussed at Monday’s committee of the whole meeting.

“Four churches have more vacant land than may be necessary,” explained Janet Prestley, the city’s director of corporate affairs. According to information presented to council, the city’s Catholic Church, the Church of the Resurrection, had about 14,000 square metres of vacant land.

Property owned by churches and other non-profits usually get a mandated reprieve from city taxes for doing religious or other charitable work, a phenomenon called “permissive tax

(This doesn’t cover more direct non-profit properties, such as church buildings. Under Federal and provincial law, Fort St. John may not charge property taxes on churches.

However, the city may decide that a church would have to pay for vacant, unused land that it owns.)

“Fort St. John provides a very high level of tax exemptions, and what we need to determine is, are we providing appropriate tax exemptions?” said Mayor Lori Ackerman. “Do we need to revisit the tax exemptions that we do provide?”

Ackerman explained that the the city has a benefits-based approach, and that if the non-profit does provide a benefit, they are “good” with providing a tax subsidy.

“For years, the community has provided an extraordinary amount in permissive tax exemptions,” she said. “What are we getting for that amount (in tax exemptions) and is it benefiting the community?”

Other changes could change the way non-profits rent property in Fort St. John.

“If a non-profit organization is renting a location, the tax gets billed to the owner, not to the renter,” Ackerman said. “What we’re saying is, rather than have staff stick their nose into the business of the renter, we’re saying what is the renter being charged? If we’re going to provide them with a permissive tax exemption, we need to provide them with a grant-in-aid, and they can pay that then.

“If they deserve tax exemption, we contribute to them, and they can pay their taxes, which in the same way it would be a tax exemption.”

Currently, the city provides a full property tax exemption for 31 property owners, which would otherwise be on the hook for an estimated $777,000 worth of taxes.

According to information presented to council, the city “has the highest allocation of permissive tax exemptions” when compared to seven other cities. North Vancouver – with a population of about 48,200, more than twice that of FSJ – had only about $520,000 in permissive tax exemptions.

Even though these organizations don’t pay property taxes, Dianne Hunter, the city’s manager, said that “council needs to think about those intangibles and the value (the non-profits and churches represent) to the community.”

Ackerman seemed to agree that more thought was needed about non-profits and

“It may take a while to sort out that out and have that conversation, but we’ll get together with the Chamber of Commerce, the School District,” she said. “When was the last time we got together with churches and non-profits?”

Hunter said that in the past, the city have been impeded from development because of land owned by non-profits. As well, she added, undeveloped parking lots can cost the community by creating drainage issues.

“It creates difficulties for others as well as aesthetics,” she said. “The intent ... was to discourage undeveloped parking lots and create an incentive towards developing a parking lot rather than just a gravel lot.”

It’s still unclear how much this could potentially cost the non-profits, and how much it could bring in to the city. According to Hunter, BC Assessment does not look at land owned by non-profits.

The changes – if they do come into effect – would not happen until 2016’s tax cycle.