INNISFAIL – Town council approved municipal tax exemptions for two non-profit groups last week that triggered passionate discussion about revenue loss and the potential for a “flood” of future new applications.
There were also serious questions raised whether groups can meet provincial legislative requirements.
The issues were brought to council’s regular meeting on March 14 when separate tax exemption applications from the Innisfail Ski Hill and Innisfail Town Theatre (ITT) were tabled.
While granting municipal tax exemption status for non-profits is routine for other municipalities, such as Olds and Mountain View County, it is new territory for Innisfail.
Sherri Smith, finance manager for the Town of Innisfail, presented both applications. However, chief administrative officer Todd Becker began the presentation by outlining tax exemption provisions under the provincial Municipal Government Act (MGA).
“It’s a new request to the Town of Innisfail, so administration engaged with town legal just to make sure we understood the legislation and the application itself,” said Becker, adding the legislation is complex and comprehensive, taking many hours to go through. “From a legal perspective both of those applications meet the requirements of the MGA and the regulations and (administration) recommended the town approve both of those applications.”
Council approved both applications and it will mean a combined loss of $9,038.35 in tax revenue for the town.
Becker told the Albertan on March 15 tax exemption applicants are required to apply either annually or every three years.
Coun. Don Harrison wanted to know whether the March 14 approvals would trigger a “flood” of new applications from local non-profits.
“At what point do you ever say no? We just approved two applications. They meet (MGA requirements). Legal has given us that advice. They come back next year with the same thing, we can’t say no,” said Harrison, who wanted administration to work on a list of potential new applicants from the local non-profit community.
“Where does it end? I think it’s very important that we get this list of all the properties because I think what’s going to happen after this hits the media we’re going to be flooded (applications) for this year," added Harrison. "Let’s make sure we got our ducks in a row.”
Becker told the Albertan he will pull all appropriate information from the MGA for council so they can then determine how it applies to potential tax exemption properties in Innisfail.
Mayor Jean Barclay said she does not “fear” a flood of applications from non-profit groups seeking a tax exemption as the MGA clearly sets out the guidelines on who is eligible or who isn’t.
As for the potential revenue loss to the town, Barclay said she was confident the town’s new economic development strategy will help offset future revenue losses.
“I’m very confident Innisfail is going to need to grow and we are going to see substantial growth in commercial and industrial areas,” said Barclay. “Yes, we see some potential loss of revenue from these particular applications and that tax loss will be carried by the rest of the community because we have to ensure we maintain revenue levels.”
Coun. Jason Heistad said he would like to see beneficial community development opportunities built in to the tax exemption process.
“How to we build those synergies to help individuals that want to be involved in the community in a different way. Maybe there’s an engagement with young people who may not have the affordability to attend those events or ITT or the ski hill,” said Heistad. “How do we build on that tax exemption and make it about the community? Rather than just giving the exemption there’s a win-win out of this.”
Becker said the town has to “explore deeper” the “charitable and benevolent purpose” provisions in the MGA, as was referenced in the ITT application. Becker noted ITT did provide a theatre production in 2021 and is working on another this spring.
“If for some reason they did not move ahead with their 2022 show then they would consider not meeting the benevolent purpose according to the legislation,” said Becker. “So, if they want to just shut their doors and do nothing then we have the ability to request the equivalent dollar value to their taxes back.”
Patrick Gleason, president of ITT, said while his group has a “modest tax bill” of $2,665.08 for 2021 every dollar will count for the organization’s current fiscal health. He said with the rising costs of “just about everything” ITT has had to raise ticket prices for its upcoming spring production Noises Off from $50 to $55.
As for council’s discussion on whether his group’s facility is used for a “charitable and benevolent purpose” that benefits the community, Gleason said the Ol’ Moose Hall has been used by other groups in need.
He noted the local Brownies use it as a distribution point for Girl Guide cookie sales and before COVID struck two years ago, the facility offered concerts for travelling up and coming musicians to help offset their travelling costs.
“We’re looking to have that kind of similar thing happen again,” said Gleason, noting ITT is in the process of “picking up the pieces” after the pandemic.
Just last week the Innisfail and District Historical Society announced that ITT has offered the Ol’ Moose Hall as the venue for the society’s June 4 local celebration to mark the 70th anniversary of the accession of Queen Elizabeth II.
With the ski hill now able to save at least $6,373.27 from what it had to pay in municipal taxes for 2021, the extra load of fundraising for volunteers, particularly for the new $380,000 chalet, will be eased, said president Brent Jackson.
“It will be a great benefit,” he said. “I think the ski hill benefits the town as well. It’s a win-win. It’s a revenue loss for the town but probably more of a community enhancement gain for them.”
Last May, the ski hill received $35,000 from the Town of Innisfail to help with the $385,000 cost for the new chalet. Jackson said the facility is “just about” completed with just a “wee bit” more fundraising to go.
He added the money saved from the tax exemption will also help with the ski hill’s ongoing maintenance expenses.