All classes of taxes but two are going up by nine percent, after council set tax rates at their April 23 meeting.
Residential, small business and light industry will all see their taxes go up by nine percent, while major industry and utilities will not.
Utilities are regulated by provincial law, and cannot be more than 2.5 times the business tax rate, meaning utilities can only go up by 5.34 percent.
More problematic, according to some people, is that major industry’s tax rate is not going up.
However, the trouble with only looking at percentage change doesn’t take into consideration that the District is only looking to cover a set amount as laid out in the budget.
Taxes were due to go up this year no matter what. During last year’s budget discussions, council increased spending by 13.5 percent. But, because they didn’t pass that increase onto the tax payers, they only increased taxes 10 percent and used a portion of the district’s reserves to cover the shortfall.
However, much of that increase was operational, mostly wages, as the district had just re-negotiated their contract with the union.
And, with union wages going up again this year, it means that going into this year’s budget, the district already needed to increase taxes by 6.5 percent, assuming that assessments didn’t change year over year.
And that’s where the issue lies. Because, while residential property rates on an average property increased by about 13 percent since last year—or about $23,000, the average assessment for major industry in the area has gone up significantly. Chief Financial Officer Natalie Wehner says much of this change is due to a “non-market change in assessment for major industry. Non-market change is for the addition of new construction, properties that have subdivided, or can result in a decrease for demolition, amalgamation of lots etc. These changes are not driven by the market thus the name.”
How significantly? Last year, the district collected $4,446,368 in taxes from major industry. This year, with a zero percent increase, major industry will be paying $10,651,284 in taxes, or $6,204,916 more than last year.
Indeed, as of 2024, taxes on major industry covered just over 40 percent of the town’s tax base. Even without increasing the major industry tax rate percent, the amount they’re paying is going up to around 60 percent of the town’s tax base for 2025.
While this sounds good in principle, if the mines were to go away it would leave Tumbler Ridge in a very vulnerable position, with over half of its tax revenue evaporating.
Even with a zero percent increase, the district will be collecting about $6 million over its budget for 2025, which will be going into reserves for future spending such as paving or the proposed new fire hall or into savings in case the mines do go down.
But does this mean, asks Councillor Norbury, that the district is taxing six million more than it needs to?
Wehner says no. “There’s a policy in place that says to put 40 percent of the taxes from industrial and light industrial into a tax stabilization reserve, so based on that policy and the figures that are in here, $5.1 million would have to go into the tax stabilization reserve.”
She says the district hasn’t been doing this recently. “If there’s a downturn that money can be utilized for all classes,” says Wehner. “It will help cover the costs that would have normally came in from major industry to make sure that there’s not a spike in those other classes.”
A zero percent tax increase means major industry are still paying $6.2 million more this year. What does a nine percent tax increase look for the average homeowner? Wehner says the average home, assessed at $203,000, will be looking at paying $97.54 more in 2025, while the average condo owner should expect to pay $46.32 more in 2025.
Mayor Krakowka says he understands the purpose of reserves. “Previous councils and mayors and staff that were here at the time did the same thing when they when they built these reserves. To help with replacing asphalt, to help with our sidewalks, to help with equipment. That’s why these reserves were suggested.”
He says Tumbler Ridge was built to service the mining industry, but knowing the town was almost all built at the same time means that that infrastructure is all going to fail at he same time. “Already we’ve seen some water main breaks and other failures. Previous councils had the attitude ‘let’s save when it’s good times for when it’s bad times.’
However, he says, there is a limit to that. “Once we get a buffer—if this tax stabilization reserve hits a target number, where we could run the municipality for three years or four years—once we hit that number, we don’t need to do that that anymore.”
Councillor Norbury says he sees the value of saving for a rainy day. “I was on council when we did have a downturn, but our taxes didn’t drop to zero. Even when it was getting pretty dicey, two years after mine shut down, we were still bringing in taxation. We were still bringing in $10 million in taxes, so it’s not like we have to cover the entirety of taxation through reserves. I definitely appreciate the mayor’s comments in regards to how much should we put aside for three or four years, until things come back online, because realistically it’s cyclical. We’ve traditionally seen it go for a few years and come back. The last downturn was about two and a half, three years until we saw Conuma open.”
He says he thinks the number proposed is too high. “I’m struggling with that. If we are putting away enough for three years, we should be putting $50 million away. I’m struggling with that because we already have a high taxation year. Also, in our last term, we did not have tax increases across the board. We tried to thread the needle: two percent here, four percent there. One thing I learned through that process was that people want equality across the board. They want everybody to pay the same. My concern with option one is not everyone’s paying the same, not everyone’s paying their way, in my opinion. Our community was built to encapsulate industry, to help offsets the cost to our town so it’s not all on residential and businesses. It’s been successful.”
Wehner says the $6.1 million is not a number that was decided upon, that is the amount that is being collected without increasing taxes on major industry.
Councillor Gulick says major industry is already 60 percent of the district’s total taxation. “That’s a pretty big number, and if we tax our major industry—who tend to be some major employers—that’s not good for the for the community either. Do I understand all of this ? No. But what I do understand is that we have some pretty great staff and this is what they’re recommending, so I am comfortable with this.”
After close to an hour and a half of back and forth discussion the tax increase was approved, with Councillor Norbury and Councillor Noksana opposed.
Trent is the publisher of Tumbler RidgeLines.
