Industrial companies in west Sidney are concerned the town’s plan to increase their tax rate this year will have a negative impact on their bottom line, even forcing some businesses to reconsider their growth plans.
The Sidney and North Saanich Industrial Group met with town council over its plan to bring the class five (light industrial) tax rate in line with the town’s commercial rates. Those rates have been on par prior to four years ago, when the industrial charge was gradually lowered. Town staff want that levy to get back up to its traditional levels and policies put in place to prevent such a slide in the future.
John Juricic, executive director of the Industrial Group, says such a plan could have long-term negative effects. He said the state of the manufacturing sector in west Sidney is somewhat tenuous, as companies face issues such as a lack of housing affordable enough to keep their employees closer to the area, thin profit margins and a lack of growth in their businesses in the current economy.
Greg Ramsay, owner of Ramsay Machine Works, said the impact on his business alone from current municipal and other taxation is around $23,000 per year.
The town’s planned tax standardization, he said, will add $5,000 to that bill over the next two years.
“That’s an additional $10,000,” Ramsey said, noting that amount to a tax increase of around 40 per cent over the two years.
“The last four years have been our toughest four years in our history,” added Doug Jeffery of Nicholson Manufacturing. “We barely made it through this time.”
Juricic said the consequences of the town’s tax plan could create the risk of some operations moving elsewhere. Armed with that, he said the group wants to keep meeting with the town to work out a compromise.
At its April 8 meeting, council agreed to meet further with the Industrial Group but were clear Sidney faces its own challenges.
“We are trying to be fair,” said Councillor Mervyn Lougher-Goodey, adding even if the town levels out the class five rate in line with its commercial tax, its still quite low among south Island municipalities.
He added with costs such as a growing fire department, police contracts and infrastructure costs, Sidney needs to be able to pay its bills.
Councillors Melissa Hailey, Tim Chad and Marilyn Loveless asked staff about the impact of the increased tax rate. Director of Corporate Services Andrew Hicik said rough estimates made a week ago indicated businesses would see an increase of between $1,300 and $8,700, based on an equal increase among 10 properties in the west Sidney industrial area. He did add one property will see an increase of $10,000-plus, due to the increased value of its land. The bottom line, he noted, will depend on each property’s assessed land value for 2013.
Hicik did add that these businesses have benefitted from four years of significantly lower taxes.
With the final budget document looming, council voted to meet again soon with the Industrial Group (they initially met on this issue at the beginning of the month) and continue the conversation and seek a deal.