City eyes tax exemptions to spur downtown improvements (Penticton)

By WOLF DEPNERWestern News StaffMay 11 2007 http://www.pentictonwesternnews.com/

Downtown property owners may get a tax break from the city. Council instructed staff to look into a property tax exemptions for building improvements within the downtown core, following a recommendation from the city’s downtown revitalization period. The exemption would freeze the municipal portion of taxes on building improvements for five years. Property owners would continue to pay taxes on the properties before any improvements. Coun. Joanne Grimaldi said this proposal shows leadership and offers a “win-win” scenario for both the city and businesses, pointing to other communities like Nanaimo where it has been successful. “I hope we can find some time (to look into this proposal),” she said. “There’s a real interest from the business community to see it happen.” Coun. Rory McIvor agreed with the argument, pointing to improvements in Salmon Arm.

The Community Charter allows the proposed tax exemption. Once the exemption period ends, property owners would resume paying taxes based on current assessments. But Coun. Garry Litke raised questions whether this proposed tax exemption would violate the terms of the new Trade, Investment, and Labour Mobility Agreement between British Columbia and Alberta effective since April 1. He wondered whether the exemption could be interpreted as an illegal subsidy under TILMA which will affect municipalities fully April 1, 2009. City administrator Leo den Boer said the answer depends on whom one asks. “Some say it will (be a subsidy),” he said. “Others say it will not.”