Smiths Falls plans to limit tax rebates on vacant buildings

Posted on: July 17, 2017

Chris Must

Opting to keep a provincial program that provides property tax rebates to the owners of vacant commercial and industrial buildings, Smiths Falls town council has decided instead to reduce the financial impact of the program by limiting the number of years owners can apply.

The provincial government announced earlier this year that it would allow local municipalities to apply to the Minister of Finance by Aug. 1 for permission to cancel or modify the program.

Noting that neighbouring municipalities, including Perth, Carleton Place, Kemptville, Brockville and the County of Lanark have decided to keep the rebate program, Smiths Falls councillors voted at a July 17 meeting to introduce new eligibility requirements and to limit how many times a property owner can apply.

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Presenting a third report on the issue to council July 17, town clerk Kerry Costello said, “I’ve come up with what I hope to be a unique-to-Smiths Falls proposal.”

Although the proposal included gradually phasing out the rebate program, which cost the town $148,309 in lost tax revenues in 2015, councillors expressed fears that eliminating it would place Smiths Falls at an economic disadvantage with neighbouring towns keeping the program in place.

Councillor Joe Gallipeau said that even with the rebate, owners of vacant commercial properties are “still paying their fair share,” because they still pay the same amount of tax as a residential ratepayer. For a property owner to purposely keep it vacant just to receive a rebate doesn’t make sense, Gallipeau added. It is far better to rent the property and receive income from it, he said.

Councillor Chris Cummings commented that the rebate program should be kept to ensure that Smiths Falls remains an attractive destination for investors. However, he added that a “made in Smiths Falls” solution needs to be found to control its costs, because “We have a huge surplus of commercial properties.”

After some discussion all members of council agreed that some eligibility requirements should be introduced, with Gallipeau arguing that such criteria would “solve all our problems.”

Councillor John Maloney argued for property standards to be enforced, while Councillor Dawn Quinn was in favour of scrapping the program altogether and redirecting funds to the Community Improvement Plan.
Eligibility criteria proposed in Costello’s report include a requirement to meet property standards, and that the property must be “capable of being leased and available for lease.” Councillors also proposed to limit the number of times an owner can receive the rebate to either three or five consecutive years.

Council voted to apply to the Minister of Finance for permission to make these changes.

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