Halifax council passes budget, considers commercial tax change for next year

Halifax regional council has passed its 2021-2022 budget, slightly lowering the tax rate to keep the increase to the average property tax bill to 1%.

The budget came to council on Tuesday for final approval after months of near-weekly budget committee meetings where councillors hashed out the details for each business unit. The final details, including the tax rate, were hammered out during the committee’s April 21–22 meeting, where councillors voted to cash in on extra deed transfer tax to increase the budget by more than $10 million.

The full budget document, available here, lays out each department’s budget in more detail than is made public during the budget meetings. Halifax Regional Police will spend $265,400 on polygraph testing in 2021-2022, for instance, a 2% increase over last year’s $261,900.

The staff report to council laid out the exact tax figures for 2021-2022. With the tax rate reduced from .815% to .813%, the base tax bill for the average single family home will rise $21 to $2,036. The bill rises while the rate falls because the assessment increase from 2020-2021 to 2021-2022 is 1.3%.

For the average commercial property, assessed at $1,465,300, the base tax bill will rise $436 to $43,270, with the tax rate falling from 3.000% to 2.953%.

Councillors quickly and unanimously approved the budget, with none of them offering any comments or questions following the budget presentation from chief administrative officer Jacques Dubé.

Commercial assessment averaging en route

Even after the budget vote, council kept talking taxes.

Bruce Fisher, the municipality’s manager of fiscal policy and planning, presented a plan to smooth out tax increases for some commercial properties by averaging out their assessments. The idea is to make taxes more predictable for commercial property owners, even if their properties rapidly increase in value.

The proposal is part of a suite of commercial property tax reforms coming over the next few years with a goal of making the city’s tax regime more fair. As the Halifax Examiner reported in September, that’s going to include differential tax rates based on the size and location of properties, and potentially a break for small businesses.

But in front of council on Tuesday was another idea: when a commercial property’s assessment spikes by 5% more than the average increase in a given year, the municipality will implement the increase over three years.

Fisher gave the example of a property assessed at $1 million. If that property was assessed at $1.3 million the next year, the municipality would phase in the increase. In the year the assessment spikes, the owner would pay taxes based on a $1.1-million assessment, then a $1.2-million assessment the next year, and a $1.3-million assessment the third year.

The recommendation before council was to implement the plan only in “areas serviced by wastewater facilities and a water system,” leaving rural areas out. That’s seen as the easiest way to change bylaws to make it happen, amending the regional plan to create a new “Commercial Development District.”

If all goes to plan, the new system will be in place for the 2022-2023 fiscal year.

Also at council on Tuesday…

• The Spring Garden Road streetscape budget increase passed, meaning the bulk of that work will get done this year
• A motion directing staff to study a pedestrian bridge to get people from a mobile home park to the Sackville Transit terminal passed

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