Councillors were receptive to reopening a conversation about a heritage tax rebate when they referred a request from downtown merchants to the Town’s audit committee, which was meeting virtually Tuesday afternoon.
It was considered for the 2020 budget, said Allan Bisback during Monday’s virtual council meeting, but was not adopted.
“But that was a different time and things have changed,” said Bisback, suggesting the business case for a heritage tax rebate should be revisited.
About 35 heritage district merchants are hoping for tax relief from the Town to help them survive the pandemic, and the heritage tax rebate seems like the most immediate and effective solution.
Many of the merchants behind the request have been in business for decades, says Kim Hughes, of the Sunset Grill on Queen Street.
They also asked council to consider property tax forgiveness in the interim.
When the audit committee met Tuesday, says Bisback, members made some recommendations to put before councillors, including ask council, specifically Lord Mayor Betty Disero, to request urgent support from the Province for businesses on Queen in historic district. They also want to create an urgent subcommittee to research other similar municipalities with historic districts, and report back in one week. And they are recommending town staff move forward with the heritage tax rebate program business case, which was presented during the 2020 budget discussions, and engage a consultant now to design a program for implementation in 2021.
Eduardo Lafforgue, president of the NOTL Chamber of Commerce, is supporting the request for a heritage tax rebate, explaining that most tenants on Queen Street pay the property taxes on their leased properties, as set out in the contract with their landlords.
A rebate will provide direct relief to those tenants, who are dealing with both high rents and high taxes, and to owners who operate businesses on their own properties, he says.
A letter to council from the merchants brought the matter forward Monday, but the substance of the rebate was not discussed once Bisback, who sits on the audit committee, made a motion that it be referred to that committee. Councillors supported the referral and a request that a special council meeting be called to deal with any recommendation the committee might make as quickly as possible.
Bisback says the audit committee discussed the rebate at length last fall, and finally decided, as they tried to reduce a large projected budget increase, that this was not the year to go forward with it. If they had, the recommendation would have been to study it for this year, for implementation in 2021.
It’s a complex issue, he says, with many questions to be answered, including whether the rebate would help those paying high rents, who would be eligible, and whether the Region would still partner in the program.
But while some tenants pay property taxes on their location, Bisback says not all do, not all are in designated heritage buildings, although they are in the heritage district, and he’s unsure whether the process of issuing a rebate would allow it to go to tenants rather than property owners.
He believes there are some misunderstandings amongst merchants about the program and the process. It’s not as simple as approving it at 40 per cent and seeing money start flowing into the hands of tenants, he says. In addition to laying out a process if a recommendation is made to approve a heritage tax rebate, he added, the Town will still need to find the money to fund it.
The Town has also been encouraging businesses to apply for federal funding in the way of wage and rent subsidies, and small business loans, he added.
The letter from merchants before council Monday says businesses have received no assistance from the Town or Region, yet have costs significantly higher than the rest of the town, and rely on six months of tourism. “Without this revenue, some will not survive. This is scary for all businesses on Queen Street. We are all dependent on each other and our unique offerings that draw tourists to our town. Empty storefronts will not benefit anyone and will devalue the town. The Town and Region need to support us if we want Queen Street to remain a vibrant street, the centre of Niagara-on-the-Lake.”
The heritage rebate program was initiated by the Province in 2001, in response to soaring property taxes as a result of current market value assessments. It offers municipalities the ability to rebate eligible heritage properties from 10 to 40 per cent of their taxes — it was left up to the municipality to choose whether to opt into the program, and the rate of the rebate.
Bart Maves was the local MPP at the time, and went to bat for NOTL, responding to a request for relief from huge tax increases.
Although other communities across Ontario benefit from the rebate, NOTL does not, although local property taxes help fund rebates for other participating municipalities, says Lafforgue.
The Niagara Region offered to match tax reductions or refunds adopted by local municipalities in this program, but despite repeated requests over the ensuing years, mostly from the Chamber of Commerce, Niagara-on-the-Lake councils have chosen not to offer the rebate.
Bisback says before a decision is made on the program, the Town must be sure that Regional partnership is still available.
The Town has instead offered a heritage grant incentive since 2006, to offset restoration and improvement costs to heritage buildings.
The merchants’ group was hoping for a motion from council Monday to address the rebate program, as well as interim property tax forgiveness from the Town and the Region for at least two months. They make the point that their high assessment is based on the value of tourism, which is flawed “when the town is officially closed.”
It needs to be a straight credit to taxes so that it can filter down to merchants, Hughes says. “We are perplexed as to why this is not already in place.”
The rebate program, she adds, is the most logical and affordable way for the Town to help merchants in the heritage district, and suggests the incentive program could be dropped to help pay for it.
The cost to the municipality, and the benefit to merchants if the program is adopted, would have to be updated, and would depend on what option from the 10 to 40 per cent range is chosen, says Bisback.
While there are questions that remain to be answered, sending it to the audit committee for discussion Tuesday was a way to have a full discussion and expedite a resolution, he says.