Committee recommends scrapping tax breaks for vacant commercial and industrial properties

Property owners of vacant commercial and industrial land — that's vacant land with no buildings present — could soon see an increase in their share paid toward the City of North Bay's tax levy.

Coun. Scott Robertson had been advocating for Council's general government committee members to consider dropping the 30 per cent reduction of the tax burden for those vacant landowners but did not foresee a complete halt to the easing of the tax burden for the vacant commercial/industrial land sub-class.

See related: Robertson objects to residential taxpayers subsidizing tax breaks for vacant land owners 

Deputy Mayor Tanya Vrebosch, presented with options to bring the current 30 per cent threshold down to 15 per cent and zero, opted to go with the latter with the unanimous support of the committee.

According to City staff, the increased tax burden could spur some of the vacant commercial/industrial landowners to either develop those properties or sell to someone who will — a scenario that falls under this council's growth mandate.

The recommendation will move to the regular meeting of Council, May 18, accompanied by an updated report on the City's tax policy for 2021. Without any further developments, Council members will vote on the by-law that evening with final tax bills to be issued the first week of June with a due date of June 30. 

It is a dramatic shift in tax policy for the City and, although the tax rate is still increasing, the burden will no longer fall on taxpayers — including residential taxpayers who comprise 68 per cent of the City's assessment — to subsidize the tax bills of landowners content to sit on undeveloped land. 

Under the zero per cent option, commercial property owners with a building would also see a small drop.

"It's a re-shuffle," explained Chief Financial Officer Margaret Karpenko. "The vacant landowners will pay more and those with structures on their land will pay less. The residential rate will go down," while residential vacant land will not be affected.

"The majority of commercial landowners are going to see a reduction," clarified Coun. Dave Mendicino. "The vacant land, with no buildings on it [286 out of more than 20,000 properties], their taxes will go up. Commercial property owners' [with structures] taxes will go down."

Karpenko was quick to ensure everyone was on the same page before voting on moving the recommendation forward.

"When we say 'going down,' I mean relative to the status quo policy. Overall the tax rate is going up. When individuals or businesses receive their tax bills, by eliminating this sub-class, they are not going to go up by as much as they otherwise would have by maintaining the status quo," of a 30 per cent burden reduction for vacant commercial/industrial properties.

The current model "doesn't mean we collect less taxes. That means everybody else — in this case the residential users — are subsidizing that reduction for commercial and industrial vacant land," said Robertson earlier this week on the subject.

He added, "Of all the people who need a break, it's probably not people who are hanging on to vast swaths of commercial and industrial land."