The Town of Drayton Valley is looking at bringing in a tax incentive to help new local businesses.
Administration brought the idea to town council at their June 29 meeting, proposing a tax incentive bylaw with multi-year tax exemptions, reductions or deferrals for non-residential properties. The belief is this will attract investment, development, and revitalization projects that provide job creation.
As explained by administration, if a new or existing business creates a certain number of jobs, they would be eligible for the tax break. If town council likes the idea, then administration would get to work, doing the research of finding out how many jobs need to be created, and how big a tax break.
Councillor Amila Gammina was concerned that this idea was coming from administration, and not the Economic Development Committee.
“If these initiatives are not coming from them, then those committees are redundant and obsolete,” explained Gammina.
Administration agreed that the optics may not be good. According to administration, how it typically would work is the Economic Development Committee would have the idea, make the recommendation to administration, and then administration would start developing it.
Administration further explained that administration and the various committees do share the role of idea generation. To abate some of Gammina’s concerns, administration would submit the draft bylaw to the Economic Development Committee for their review and feedback before finalizing it for town council.
Currently, the town does grant tax breaks for job creation. Town council makes the determination on a case-by-case basis. Councillor Rick Evans wanted to know if this would establish criteria for a businesses to plead their case to town council, or if it removes council from the process.
Administration explained that the goal is to take the politics out of the process by having council establish a set of priorities for businesses to meet. If the business meets those priorities, then they get the tax break.
Evans liked that explanation.
“I am all for standardizing it so that it is a level playing field for anyone trying to start a business in town,” said Evans.
Councillor Tom McGee pointed out that the previous council tried to develop a similar bylaw, but it fell apart. McGee wanted to know why it would work this time. He also wanted to know if any existing businesses would immediately qualify.
Administration responded that, thanks to some recent changes to the Municipal Government Act, drafting a tax incentive bylaw has become a lot easier. As for McGee’s second question, administration knows of one business that would qualify for this tax break, but that more would rapidly become interested.
Council passed the recommendation, so administration is now working on developing the bylaw. However, Gammina added that they may need to review the process to ensure that the committees are more involved moving forward.
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