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Little hope of swaying province on tax changes

RMOW to address $3 million shortfall in next budget cycle

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By Alison Taylor

Whistler’s acting mayor, Gord McKeever, holds out little hope of changing the province’s mind on its new tax legislation, which could cost the municipality $3 million annually.

“We’re going to continue to lobby but there’s not a lot of optimism that it’s going to be effective,” said McKeever, who is standing in as Whistler’s top politician while Mayor Ken Melamed is on holidays.

“We don’t have a lot of different arguments (other than the ones) we’ve been carrying forward all the way.”

Last week Rick Thorpe, minister of Small Business and Revenue, introduced changes to the provincial property tax system. Effective 2008, Class 1 strata hotel units will continue to pay residential taxes, while Class 6 units will pay a blend of residential and commercial rates based on the commercial use of the room.

And while the changes provide certainty to taxpayers and investors across the province, it comes at a potential $3 million cost to the municipality.

Whistler, which has more strata hotel units as a proportion of its budget than anywhere else in the province, is the town most negatively affected by the proposed legislation.

For years the municipality has been lobbying for a solution — one, they argued, that would see the municipality remain revenue neutral but provide certainty to the tax system.

“We’re obviously not happy with this at all,” said McKeever. “And as far as how we’re going to deal with it, we haven’t really had a chance to formulate a strategy.”

The changes will not affect the $50 million 2007 budget. But as council begins to look at next year’s budget in the fall, the $3 million in lost revenue will have to be made up somehow, either through increased property taxes, or cuts to programs.

Squamish Mayor Ian Sutherland knows first hand the impacts of a multi-million dollar budget shortfall.

Faced with the tax impacts of the Woodfibre mill closing down, among other things, Squamish council has been wrestling to produce a balanced budget this year.

This week Squamish council passed an 11 per cent increase to residential property taxes and an 8 per cent increase to business taxes.

“For a long time Woodfibre was paying 18 per cent of our property taxes in Squamish,” said Sutherland. “They were in fact subsidizing every homeowner 18 per cent in their property bill.”

Sutherland said the mill closure forced council to reexamine things such as its fees and charges. It found that places like the arena were recovering 30 per cent of its operating costs whereas most arenas in the province recover half their costs. Council increased fees accordingly.

As for how the provincial decision will affect relationships with the province, McKeever was positive. Whistler has been dealing with the province on many different projects — financial tools, the Fitzsimmons land slump, the day skier parking lots, the wastewater treatment plant upgrades.

“It’s a multi-faceted relationship,” he said. “We took one on the chin this time.”

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