Bonnyville Council: Giving Tax Breaks Would Set a Poor Precedent

Bonnyville Town Council received a request from a local work camp to reduce the business’ taxes for 2016. Director of Lodging Operations for Clean Harbors, Chris Short, wrote Council of the difficulties the economic downturn has had one the business, so much so he was afraid the company could not afford to pay the taxes if the remained at the 2015 amount. Council, though sympathetic to Clean Harbors’ situation, was not willing to set a precedent of reducing taxes during tough economic times and ultimately denied the request.

In the letter addressed to Bonnyville’s Chief Administrative Officer (CAO) Mark Power, Short states “in the economic downturn, we are all facing in Alberta, we have been unable to secure occupants outside of our own Clean Harbors personnel in the area.” Short explains the business leases the land from a third-party and plans to move assets off the land after the lease expires in March of 2016. The idea is to use the land as storage and not lodging after the lease is terminated. Since, Clean Harbors falls under an income based tax assessment, the letter calls on the Town to help with their economic situation by reducing the business taxes. “Clean Habors respectfully asks the Town of Bonnyville for a reduction in the taxes for that site if it is being used for storage, with the understanding if we open the lodge we would revert back to the previous tax rate.” According to the letter, Clean Harbors pays $6,000 per month in taxes to the Town of Bonnyville.

As CAO Powers explained to Council, Clean Harbors, like other work camps in Bonnyville, is assessed the same as a hotel, on an income based approach, “we have talked to the assessor with regards to how work camps are being assessed and confirmed that they are being treated the same as hotels, they are assessed based on market value and the income approach,” Taxes are set based on the assessment, Powers estimates that the assessment for Clean Harbors, and other businesses in Bonnyville, will be lower than the previous year. However, he is unable to determine assessment or the exact reduction at this time, since the assessment was only done at the end of December. Power did state, with a high degree of certainty that he believed Clean Harbors taxes would lower due to the likelihood of a lower assessment value.  “It’s our understanding, going off the information [provided by the assessor] that there should be a reduction of approximately 30-35 percent on the two work camps we have in town.”

CAO Powers explained for Council the ramifications of lowering the business’ taxes, “you would be setting a precedence not just for this, but for the other work camp and by default, I would suggest, possibly opening the door for every property that’s based on income approach. Every property will be asking us for a discount. From [administration’s] perspective, I don’t see any other way than recommending [that Council deny the request].”

Council agreed with Power and voted, unanimously, to deny Clean Harbors request to reduce the business’ taxes.