County updates Tax Incentive Bylaw

Posted on October 11, 2023 by Sunny South News

By Nikki Jamieson
Sunny South News

Clarifying updates have been added to a bylaw aiming to bring in new investment into the county.

During their regular Oct. 5 meeting, Lethbridge County council reviewed the proposed Bylaw 23-024 – or the Commercial & Industrial Municipal Tax Incentive Bylaw.

The bylaw is an updated version of an existing one. Previously, council had passed the Commercial & Industrial Municipal Tax Incentive Bylaw #22-008 on Dec 1, 2022, with the goal of attracting new development and encouraging the expansion of existing businesses by providing an exemption in municipal taxes. Since then, however, there has become a need for clarification in the bylaw.

“So since that time, some inquiries regarding the bylaw have been made and administration has determined that some clarity is required, specifically under section 3 with regards to the criteria for the Tax Incentive Bylaw,” said Cole Beck, CAO for the County. “So essentially, we sought some legal counsel just to provide more clarity, based on either expansions that require a large infrastructure contribution from the County, or where we have other agreements in place with our ratepayers.

“The original bylaw, although it gave us the ability to not approve someone for the Tax Incentive Bylaw, it limited our ability, or there was a lack of clarity in some of those things, so we did have the bylaw rewritten with specific changes.”

The changes made to the bylaw were:

• In Section 2b, a definition was added for “Affiliated Party”.

• In Section 3.1 a & b, two new clauses were added in regard to the assessed person/affiliated party foregoing making an application for the tax incentive if they are or will be receiving another municipal benefit such as infrastructure.

• In Section 5.3, a clause was added on the CAO’s consideration of applications if other agreements with the applicant already exist.

There is no need for council to rescind the previous bylaw before passing this bylaw.

Coun. Lorne Hickey asked if under criteria, they had anything about foreign ownership and if it were a thing to be concerned about. Beck said they do not have anything on foreign ownership in there specifically.

“The changes to the bylaw considerations were more pertaining to our contributions to infrastructure, so that in the best interest of all of our ratepayers, if we were making a significant infrastructure contribution, that would be the factor for consideration as to whether they could or could not apply for the Tax Incentive Bylaw if they meet the other criteria.”

Hickey also raised concern over developers choosing to instead ask the County for infrastructure work, the cost of which exceeding the amount of the rebate they may receive from the bylaw. Beck said the clause does not say that they could come to them and the County has to pay for the infrastructure and the developers, not apply for the tax incentive. These considerations would be on a case-by-case basis.

“No two developments are the same, so if we get too prescriptive in the bylaw, it does eliminate our ability to have those. But those are the considerations that we’re trying to clarify here, because the other bylaw did not give us that flexibility, or wasn’t clear enough to provide us with that flexibility,” said Beck. “If there is a financial contribution the County makes towards infrastructure, or if a developer chooses to make a financial contribution to infrastructure the County is putting in place, those are considerations that effect that net dollar amount or how we go about implementing that. And so to say that, or even the final assessed value or the type of development, it gets a little bit tricky.”

Council passed first reading of Bylaw 23-024 in a split 6-1 vote, with Hickey voting against. Council unanimously performed second reading of the bylaw, and performed the third and final reading in a split 6-1 vote, with Hickey against.