District of Squamish Mayor Ian Sutherland said there is "no way in heck" council will agree to a finance staff proposal to increase commercial property taxes by 104 per cent.
"We know full well that the business community is very important to Squamish, it employs a lot of people," said Sutherland. "There is going to be a tax increase this year but it's going to be one that is well thought-out."
Sutherland said he agrees "philosophically" that businesses should not receive an undue bulk of the tax burden, but minimizing commercial taxes could also unduly burden residential property taxpayers.
"It takes a huge increase in residential to make up for a small decrease in commercial," he said.
The district is facing a challenging $3-million deficit - which in no small part attributable to the loss of $1.9 million in taxes from Woodfibre - and although 2006 budget deliberations did not include potential Oceanfront development revenue, Sutherland pointed out that the deficit would have been cut in half if private developer Qualex had been encouraged to partner with the Squamish Oceanfront Development Corporation (SODC) since the company had agreed to hand over $1.5 million.
"The bottom line is that if we'd been more proactive and encouraging to SODC and Qualex, than of that $3 million shortfall, $1.5 million of that would've been covered off by Qualex," he said.
But we're not facing a crisis, said Sutherland.
"This year is higher because of the Woodfibre situation and because of the increased policing costs. I don't think it's a crisis," he said. "I think we're doing what we've done every other year, which is work through the budget and we do find solutions."
The district's proposed 104 per cent commercial tax increase is part of a dangerous trend throughout British Columbia that will inevitably result in lost jobs and a damaged economy, said John Winter of the BC Chamber of Commerce.
"There's a trend across the province right now, it's been going on for about a dozen years, to increase property taxes on businesses at a faster rate than on residential property owners and it's at a point where it's going to be alarming and of concern not only to businesses but also to municipal politicians who are aware of it," said Winter. "I think they're beginning to realize that they can't go to that well as often as deeply as perhaps they have in the past."
Winter said the Chamber has been warning the provincial government of dire consequences from commercial taxation. But the province is in a difficult position, said B.C.'s Finance Minister Carole Taylor, since the Union of B.C. Municipalities (UBCM) continually reminds the province that balancing residential and commercial taxation is a municipal responsibility.
"We are concerned about it," said Taylor. "I can't say specifically with Squamish because that hadn't come to our attention, but we are concerned with the general principle that in British Columbia we're trying to encourage businesses to locate here, we're in heavy competition with Alberta and other areas, but on the other hand taxation can be punitive and can force businesses to leave."
Despite the looming loss of Woodfibre dollars, the district nonetheless increased spending by 13 per cent in 2006 - creating 10 new positions at city hall - and proposes to increase spending by another 5.48 per cent in 2007.
The town's services should be reviewed and spending should decrease to ease the burden on businesses, said Winter.
"It's a good opportunity to reexamine the services you already are providing to the community and create some priorities," he said.Rising costs of materials along with the town's growth is undeniable, said Sutherland, and services and district staff must keep up. The 10 new city hall positions are helping to generate revenue.
"You look at city hall right now, there's not a whole lot that can be looked at as fat in the personnel side of things," he said.
