The council of the Rural Municipality of Estevan has approved a 17 per cent reduction, from 1.00 to 0.83, in its commercial mill rate factor for the municipal portion of property taxes.
This will mean a decrease of approximately $500,000 in cumulative taxes payable by commercial and industrial properties this year.
The RM said this one-time tax relief is provided as direct assistance to the RM’s commercial ratepayers in response to the sharp downturn in the local economy, exacerbated by further challenges brought about by the restrictions implemented due to COVID-19.
“The RM has maintained its commitment to fiscal responsibility by also ensuring a balanced budget for 2020 with no tax increases for either agricultural or residential properties,” the news release stated.
Reeve Terry Keating said the current economic challenges aren’t anything new, as they’ve been happening for the past few years.
“We tightened our belt, and passed it on back to the ratepayers,” said Keating.
The RM has cut back on some of its services, such as dust control and gravelling, to afford the commercial property tax reduction.
“We did have two miles of road building that we were going to do this year, so we cancelled that. We’re finding funds wherever we can to keep a balanced budget,” he said.
Normally the RM performs two applications of dust control each year, but now they will do just one.
Keating said they could justify one application due to lower traffic, stemming from COVID-19 and the lower price of oil.
As for residential property taxes, Keating said those were dropped last year, and they remained the same for 2020.
“We extended that so that they’re also paying less taxes this year. We didn’t put it back to where it was,” said Keating.
The cost of commercial property taxes has been a recurring concern for ratepayers since the last reassessment, which occurred in 2015. The numbers from the reassessment were applied in 2017. Some businesses saw their rates go up 500 per cent.
“What we did in 2017 was our mill rate was at 9.0 … and when the assessments came out and we realized how bad commercial was, and everyone with residential as well, but how bad commercial was going to be hit, we dropped our taxes, our mill rate down to 5.4 … and that kept our share of the tax roughly what it was before,” said Keating.
He also pointed out that only 48 per cent of property taxes paid goes to the RM; the rest is directed to the education portion of property tax.