Halifax councillors want staff to detail the pros and cons of listing a proposed new climate action tax separately on property owners’ tax bills.
Municipal staff have recommended council approve a 3% increase to the average property tax bill to pay for climate action outlined in HalifACT 2050. It’s part of an overall proposed increase of 4.6%, or $94 for the average residential property. While the municipality presents the numbers as an increase, the tax rate would decrease from 0.813 cents per $100 of taxable assessed residential property value to 0.794 cents.
In real terms, the climate action tax is currently proposed to be 0.023 cents on every $100 of taxable assessed residential property value. The money would go into a reserve account to be used for capital projects like the purchase of electric buses and retrofitting municipal buildings to emit less carbon.
The plan, per chief administrative officer Jacques Dubé, is to list the rate separately on tax bills, the same way the municipality currently lists transit taxes, for example.
During a virtual budget committee meeting on Wednesday, Coun. Cathy Deagle-Gammon moved for a briefing note on the risks or benefits of listing it that way.
“I was of the mind that I would like to see it separated out. It’s a new initiative. It’s a big deal. If it comes, it’s the first one in Canada, I think we’ve been hearing about,” Deagle-Gammon said.
Coun. Kathryn Morse questioned the value of listing the tax separately.
“I think it sends a negative message. If we put our roads maintenance as a separate item on the tax bill, for example, I think that would make people upset,” Morse said.
“I think it just doesn’t send the right message when we’ve all agreed that HalifACT is something we need to do for the municipality.”
Deputy Mayor Pam Lovelace made similar comments at a budget committee meeting last week.
Chief financial officer Jerry Blackwood said it’s up to council whether they want to do so, but he argued other services have been around a long time, while this one is new.
“When you look at HalifACT, it’s a bold strategy. We’re investing in climate change. It’s bold, it’s strategic,” Blackwood said.
“It’s transparent. People see the council, the city is being bold and we are investing in climate change, but it is optional. It can certainly be rolled up into the general rate and that is council prerogative if they choose to do that.”
At the start of Wednesday’s meeting, one public speaker, Céo Gaudet, argued council should scrap the idea and instead ask the province to let it charge extra gas tax in HRM. He said two cents per litre would raise the same amount of money as the proposed property tax, about $17 million annually.
“Carbon is the thing we want to reduce, so it makes sense to tax it,” Gaudet said.
It would also provide an incentive for Haligonians to drive less, Gaudet argued, while the current proposal would charge property owners more if they made their homes more valuable by making them more energy efficient.
HRM has no authority to charge that tax, and would have to convince the provincial government to allow it and let the municipality have the proceeds.
Coun. Trish Purdy, who’s been voting against the climate action tax and expressed doubt in HRM’s ability to mitigate climate change, supported the idea of an extra gas tax for Haligonians.
“Maybe this was considered by staff, but if it hasn’t, it needs to be,” Purdy said.
“We should not leave any stone left unturned looking for collaborations and funding sources outside of our homeowners and small businesses.”
Deagle-Gammon’s motion for a briefing note passed, so councillors will debate whether to list the line item separately at a future budget committee meeting.
During Wednesday’s meeting, councillors approved budgets for three business units — the chief administrative officer’s office, corporate and customer services, and the auditor general’s office. On Friday, it meets again to consider budgets from the legal, finance, HR and IT departments.
The budget building process is scheduled to wrap up in mid-April, when councillors approve the 2022-2023 budget.