Kimberley City Council has voted to adopt a bylaw that will result in Teck being exempt from paying municipal property value tax once the sale of the SunMine is complete.
In a report to Council, Chief financial officer Jim Hendricks explained that the Revitalization Tax Exemption Bylaw No. 2644 will see Teck being exempt from tax on 100% of the assessed value of the land and improvements associated with SunMine for maximum of five years.
The value of the foregone municipal tax revenue related to the exemption is approximately $65,000 per year.
“It should be noted that as the current owner of the SunMine the City doesn’t currently collect any municipal property tax related to SunMine and therefore the proposed exemption would result in no incremental change to the level of taxation revenue currently anticipated in the 2019-2023 financial plan,” Hendricks wrote.
There is already a bylaw in place today through the investment incentive program offering tax exemptions for businesses that want to improve. This includes three year agreements for community businesses and five year agreements for light industrial.
Mayor Don McCormick explained that the sale of the SunMine will soon be coming to a close.
“We’re looking forward to closing on the sale really soon. It’s an awesome deal all the way around.”
He adds that Council voted on this decision to help move the sale of the SunMine forward for a few reasons. One, because solar power is currently listed as a utility, which Teck will pay taxes on. Also, because of the potential for Teck to make future investment in the SunMine and local solar energy industry. This is in keeping with the investment incentive program.
He went on to say that wind and river power are taxed at a much lower rate.
“Solar power, for whatever reason, is considered a utility. It’s still a new industry so sometimes you get these anomalies,” he said. “There’s no particular reason for that anomaly. It’s a bit of a disadvantage.”
Teck, says the Mayor, has asked for the solar power to be designated in the same category as wind and water.
“Until [the province] has made that final designation to put solar power in the same class as other renewables, we’ve agreed to forgo those taxes in the meantime,” said McCormick.
He says that Teck’s request is consistent with other businesses that are part of the investment incentive program, but in a different way.
“If that designation changes in a year, the taxes will be changed,” McCormick said.