Churches, non-profit groups face City Hall tax hit

JOHN MOORHOUSE Thursday, October 8, 2009 Penticton Herald:

Several Penticton churches and non-profit organizations stand to lose their tax-free status in 2010. That has the minister of one affected church suggesting the move is like a slap in the face to such non-profit organizations. City council this week voted narrowly in favour of removing part of the tax exemptions from 24 churches and other organizations including the Salvation Army, SPCA and Seniors Drop-in Centre over the next three years. Plans call for the groups to lose 10 per cent of their exemption in 2010, with further 10 per cent reductions to follow in 2011 and 2012. However, dozens of other organizations will retain full tax exemption. One of the criteria for being excluded from the city‘s tax exempt list is whether an organization has more than $50,000 in working capital. Among those facing the introduction of municipal taxes next year is Saint Saviour‘s Anglican Church, which currently has almost $8,200 in tax exemptions. Under the city plan, it would face an $820 tax bill in 2010. The church itself would remain tax exempt, but the land surrounding it could be taxed. Rev. Michael Stuchbery said Wednesday he‘s surprised by the city move and sees it as somewhat of a slap in the face to Saint Saviour‘s and other churches, pointing to their role in the community. “We do so much for the public good,” he said. “For example, we have the Soupateria on this property which came out of the church originally.” People will often come in off the street for free counselling and other services, Stuchbery added. “There‘s just so much that the church does for the community, and as it is, we run deficit budgets,” he said. “Churches don‘t have the money to pay.”

Stuchbery wondered whether a municipality could supersede provincial legislation which allows churches to be tax exempt. City clerk Cathy Ingram said the city is not looking for additional tax revenues overall. Currently, revenues which would have come from the tax-exempt organizations, are picked up by other city taxpayers. “Either these people pay or Joe Public pays, at the end of the day the city still gets the same amount of money,” she said. Ingram added no group should be caught off-guard by the reductions in tax exemptions. “This shouldn‘t be a shock factor,” she said. “Every year when we send out the applications, we do advise them that permissive tax exemptions are not a given. It‘s at council‘s discretion and we do recommend that they budget for the taxes for the following year.” Mayor Dan Ashton said he expects the city to hear back from the affected organizations in the weeks ahead. "This is very difficult for all of us to take a lot at this,” Ashton said. “But let‘s cut to the politics on this. We‘ve been charged to take a look at this and this affects each and every individual in Penticton.”

Council voted 4-3 to proceed with the tax exemption changes, with councillors Dan Albas, Garry Litke and Judy Sentes opposed. Albas said he doesn‘t like picking “winners and losers” for inclusion on the tax exempt or non-tax exempt lists. “Regardless of whether it‘s a parking spot or a pew, there is tremendous social value in these organizations,” he said. “As they take money from their daily operations to give to the city for their taxes, I’m very fearful that during this (tough economic) time we‘re going to be reducing their ability to offer social help and assistance." Albas said the best way to cut taxes is for the city to live within its means and look for ways to reduce the cost of government.