The Rural Municipality (RM) of Estevan is voicing concerns with an increase in property taxes that is facing many of its businesses.
The RM and the Estevan Chamber of Commerce recently held a meeting with Estevan MLA Lori Carr to discuss the issue. Many of the commercial and industrial businesses in the RM saw their property taxes increase between 200 and 500 per cent this year, thanks to the provincial reassessment and an increase in the education portion of property tax.
The reassessment is based on property values for Jan. 1, 2015, when the economic slowdown that has gripped the southeast region was still in the early stages. At the time, property values were higher.
“There was high market value on the land,” said RM of Estevan administrator Grace Potter. “It is the land valuation that has gone up so much.
Business owners are frustrated with the results of the reassessment, she said. They’re already feeling the pressures of trying to stay in business thanks to the lower price of oil, and now they have something else to worry about with higher property taxes.
Potter estimates there are 60 to 80 businesses affected by the property tax increase.
The RM has tried to be pro-active, she said, and let the businesses know that the RM supports them, but their property tax increases are due to reassessment and the education portion of property tax.
“We’re certainly hoping that something will happen to help them out,” said Potter.
The RM has been asking for the leeway to separate the resource-based commercial properties from the other commercial and industrial-based properties for its property tax categories, Potter said. It would allow the RM to apply a separate mill rate. She says the provincial government has not granted them that autonomy.
“We’re still fighting for that,” said Potter. “They hear from us every time I get a chance to go to the mic, or anyone else gets a chance, but so far, no luck on that.”
She would also like to see the South East Cornerstone Public School Division and the Holy Family Roman Catholic Separate School Division granted the ability to set their own mill rates.
Potter said some businesses are talking about leaving the RM or shutting down due to the increase in property taxes.
Jackie Wall, the chamber’s executive director, said assessment was one of the big issues discussed during the meeting. While some businesses in the city are facing challenges with their property taxes, Wall said the RM is having more issues because of the categorization of businesses.
“Assessment has been an issue, and education mill rates have been an issue for a long, long time. It’s nothing new,” said Wall. “But what is new is you have people who are seeing increases of 200 to 400 per cent.
“As a small business, that’s a big enough increase that I would suspect some people are wondering how they’re going cut costs, whether that’s through job losses or shutting down entirely,” said Wall.
She admits she was surprised with the size of the increase facing some businesses, and that there isn’t something to flag these increases.
“When you have an increase of 200 to 400 per cent, you would think somehow in your system you could flag that so you could double-check it,” said Wall.
Wall said she knows of other businesses in the province facing a similar increase.
“I talked to a lot of the other chambers throughout the province,” said Wall. “It is happening in other places, not as prevalent as here, but there are other places in the province where this has been a large issue.”
Wall suggested the Saskatchewan Assessment Management Agency could look at shorter assessment periods, such as two instead of the current four, or could incorporate historical averaging of data or current real estate values in an effort to reduce the chance of having such large increases.
