New rules will let the Lac La Biche County tax industrial companies at a different rate than local commercial businesses.
As part of the Air Weapons Range agreement signed last week, the municipality now has a split mill rate within its non-residential taxation that takes effect for next year’s budget. The new rate structure applies to land within and immediately surrounding Plamondon and Lac La Biche hamlets, businesses beyond those areas will remain with industrial tax rates. But Mayor Peter Kirylchuk said that the boundaries are not permanent and may be altered in the future.
The current non-residential mill rate is about 11.99 and doesn’t differentiate between commercial and industrial businesses. The residential mill rate is about 2.11. But with the new non-residential split mill rate, council could choose different rates for businesses classified as commercial within the new split mill rate zones than those classified as industrial. For example, if they choose to do so, council could now raise the mill rate for oil and gas companies operating in the municipality without affecting the taxes that stores or other local commercial businesses have to pay, said the mayor, who applauded the change.
“This is a huge win for the Lac La Biche County,” Kirylchuk said. “It gives you that kind of flexibility, it really goes a long way to promote economic development, attract businesses and give the business community a break in their taxes.”
Kirylchuk said that it will be up to council to decide whether or not taxes will be lowered for local business owners or increased for industries. But he gave the following example: with the current commercial assessment at about $125 million and industry at about $2 billion, if council wanted to lower the businesses mill rate by five — a random number — to make up the revenue they would only need to raise the industrial rate by a third of a mill. But again, he stressed that any mill rate changes would need discussion by council.
“We’ll make a decision whether we need to use it or whether we’re OK as it is,” Kirylchuk said. “But the option is there for council to use this coming budgeting year.”
Although he considers this a good change for the future, the president of the Lac La Biche & District Chamber of Commerce would like to see how council uses it.
“It’s a great thing if they have the opportunity to adjust downward,” said Brian Startichuk, explaining that currently the industrial taxes in the region tie directly to taxes paid by smaller businesses. “Right now, when they chase industrial dollars, there’s a heavy penalty for businesses.”
Along with the mill rate change, the new AWR deal gives the county jurisdiction over land north of the range that includes some current industrial users and the potential for new growth. Devon Energy is one of the current companies now within the county’s new area.
Although not familiar with all the specifics of the new arrangement made with the changes to the AWR deal, Devon Energy spokesperson Nadine Barber said the industry is happy to be now working with Lac La Biche.
“It’s a great community, we have a lot of folks who live there, we spend a lot of time there, we enjoy working with them,” Barber said. “We look at it as a very positive thing, we hope that it’s an opportunity to help grow the community.”
The only two other municipalities in Alberta that have a non-residential split mill rate are Strathcona and Wood Buffalo.