Tax reform is one step closer to reality after the Provincial Government passed Bill 52 on November 10th. The Bill was introduced by Minister Zach Churchill on Nov 1 at a Bill Briefing. After reviewing it in detail, NEBA recommended it be approved with one amendment. There was concern that frontage is not an effective way at apply taxation measures, and that square footage of building or property would produce more fair and accurate results. After requesting this change at a presentation to the Law Amendments Committee on November 7th and submitting a written request, the Bill was amended and passed on November 10th. Bill 52 reads as follows:
(1) Section 94 of Chapter 39 of the Acts of 2008, the Halifax Regional Municipality Charter, is amended by
(a) adding “(1)” immediately after the Section number; and
(b) adding the following subsections:
(2) The Council may
(a) set different commercial tax rates for commercial property located in areas of the Municipality designated by Council, based on the assessment of commercial property under the Assessment Act;
(b) set different commercial tax rates for commercial property located in areas of the Municipality designated by Council, based on the length or proportion of frontage of a property on a street, including a private road;
(c) set different commercial tax rates for commercial property located in areas of the Municipality designated by Council, based on the number of square metres in a property, the number of square metres in all commercial buildings on a property, or the combined number of square metres in a property and all commercial buildings on that property;
(d) set additional tiered or escalating commercial tax rates based on the factors set out in clauses (a) to (c) that are in excess of the rates set in clauses (a) to (c); and
(e) set additional or different commercial tax rates using any combination of clauses (a) to (d).
(3) Commercial tax rates set by the Council under subsection (2) apply in place of the commercial tax rates set under subsection (1) in the areas designated by the Council.
(4) A commercial tax rate set under subsection (2) must be reviewed by the Minister four years after its coming into force and thereafter as provided by regulation.
(5) The Minister shall determine the process for the review under subsection (4) and may review more than one application of the commercial tax rate options set under subsection (2) at the same time.
(6) The Municipality shall participate in and co-operate with the review under subsection (4) as required by the Minister, including by providing reports, records or other documents requested by the Minister.
2 2 Chapter 39 is further amended by adding immediately after Section 121 the following Section:
121A (1) The Minister may make regulations providing for the review of commercial tax rates pursuant to subsection 94(4).
(2) The exercise by the Minister of the authority contained in subsection (1) is regulations within the meaning of the Regulations Act.
This is a huge milestone! With this change is legislation, Halifax Regional Municipality is now able to set separate commercial tax rates in areas it designates using a number of different tools. The next steps will be to work with HRM and Council to ensure the tools are applied in a way that produces a more fair and equitable tax system, and addresses some of the issues associated with sky-rocketing assessments in areas like the North End. NEBA will continue to make tax reform a top priority and keep you posted on the progress. In the meantime, glass of bubbly anybody?
Here are some recent media links related to this story.
New bill could fix ‘inequity’ in Halifax commercial taxes: business advocate
Province introduces legislation to have multiple commercial tax rates in Halifax area
Tristan Cleveland: city must move towards a 'tax scheme that helps Halifax, not Walmart'