Home Financial responsibility Halifax councilors aim for lower tax hike, one gets crash course on climate change

Halifax councilors aim for lower tax hike, one gets crash course on climate change


Halifax City Hall on Tuesday, December 14, 2021. — Photo: Zane Woodford

Councilors in Halifax are aiming for lower taxes while considering taking on more debt after a budget committee meeting on Friday.

In November, Halifax Regional Council’s budget committee voted in favor of a finance staff tax framework that would base the municipality’s 2022-23 budget around a 5.9% increase in the average utility bill. ‘property tax.

Unlike other municipalities, Halifax frames its annual property tax changes with this average increase, not the tax rate change. This approach takes into account rising property values, recognizing that if the tax rate remained the same, actual tax bills would increase.

When staff developed this fiscal framework in November, they estimated that the average taxable residential property assessment in HRM would drop from $252,100 to $262,700. IMF staff recommended raising the tax rate slightly, from 0.813% to 0.821%. This increase translates into 5.9% of the average residential property tax bill, or $121 per year. For properties valued over $262,700, the increase would be greater and vice versa.

When HRM got the assessment roll for 2022 at the end of December, the increase was bigger than expected. The average assessment of taxable residential properties in HRM is now $270,000, down from $252,100 previously, so finance staff returned to the council’s virtual budget committee meeting on Friday with an updated tax framework. .

The new proposal is to reduce the tax rate from 0.813% to 0.797%. While this may be presented as a tax cut, that is not how MRH presents it. City finance staff instead presented the change to council as an increase in the average residential tax bill of 4.6%, or $94 (again, this is more for properties valued over $270). $000, and vice versa).

For commercial properties, the result is the same — a 4.6% increase in the average bill — but the rate would increase from 2.953% to 3.105%. This is because the average commercial property assessment has gone from $1,469,000 to $1,462,000. The average bill increase is $1,989.

The climate action tax remains in force

Of the initial 5.9% increase, 3% was charged as a dedicated climate action tax to pay for projects under HalifACT 2050, the city’s underfunded climate action plan. climate change. The money would be used to pay for electric buses and fleet vehicles, upgrades to municipal buildings and more. With the lower increase, staff still plan to spread out the 3%, even posting it on a separate line on tax bills.

Chief Executive Jacques Dubé described the plan to list the climate action tax separately as “transparency”.

Deputy Mayor Pam Lovelace said she was “deeply disappointed” by this framing.

“I don’t appreciate having a separate line on my climate action tax bill. I don’t have a separate line for park maintenance, they don’t have a separate line for roads,” Lovelace said.

“I don’t think this is the right approach given that internally we fully integrate work and day-to-day activities that we recognize HalifACT is the right way forward.”

Com. Trish Purdy, who opposes any increase in the average property tax bill, inadvertently illustrated why splitting the climate tax is problematic.

Com. Trish Purdy — Photo: Zane Woodford

“I’m naive, this is new to me, so I tried to read about climate change and everything,” Purdy said. “From what I understand, climate change is a global problem. Global. So a small municipality will not really have an impact on the climate.

Purdy continued:

It’s a nation-to-nation affair, to be debated on the world stage, as if there were huge polluters and carbon emitters. As if that’s where it should be taken care of, according to my little little understanding. And our federal government is already taxing all Canadian citizens with the carbon tax, which will be increased to 11 cents per liter of gasoline on April 1, by the way, along with all other goods and services. Our residents need to live. Prices are rising, we all know that. So isn’t it redundant to impose a climate action tax on our residents when the federal government is already doing it? And what is the impact in relation to the cost and the burden on our residents?

Purdy’s comments contain misleading statements: Nova Scotia does not participate in the federal carbon tax program because it opted for its own cap-and-trade system; the increase to 11 cents per liter mentioned applies to the provinces covered by this federal program and to British Columbia, which had its own carbon price before the federal government imposed it on other provinces; and it should be noted that there are federal and provincial tax credits in most jurisdictions that partially offset carbon pricing.

Dubé told Purdy that reducing carbon emissions is the responsibility of each jurisdiction.

“It’s everyone’s business. Everyone must do their part for us to be successful in reducing climate change,” said Dubé. “We have a moral, environmental and financial responsibility to ensure that we, as a municipality, reduce our emissions.”

According to HalifACT, every dollar spent on climate change mitigation today will save HRM $6 in the future.

Environment and Climate Change Manager Shannon Miedema offered to host a lunch and learn how to educate councilors about climate change, but summed it up succinctly during the meeting:

Ultimately, we are going to pay for the climate, whether we are proactive and follow a plan or we are reactive and respond to emergencies and impacts in the future. And so yes, we rely on all the municipalities around the world. All cities, all countries, the entire global community must recognize that everyone has a role to play. If we use the mindset of “Well the others are bigger than us, they’ll do it, we don’t need it”…we will fail and we will have a very uncertain and wild climate system for our globe to move forward is very scary, and scientists around the world say we really don’t want that. There will be enormous loss of human life, enormous damage to infrastructure, there will be population displacements. So we have to avoid that by sticking to a certain level of warming, which is one and a half degrees above pre-industrial times.

More debt, less taxes

Mayor Mike Savage, who argued for a 3.7% increase in the average tax bill in November, said he could support the 4.6% plan for now. He also argued for taking on more debt to pay for city projects.

“I’ve always been a fan of debt reduction and building up reserves. But you do this for a reason,” Savage said. “And to me, there’s no better reason to do that than to future-proof our city, to build a better city and HalifACT and climate investments strike me as the perfect thing for which using the debt.”

The councilors voted in this direction, choosing to forecast a debt increase of $56.1 million for 2022-2023 while respecting this 4.6% increase in the average tax bill. Purdy was the only one to vote against the motion.

The increased debt can allow the board to pay for all the projects it wants to start in 2022-2023 without further tax cuts or increases. It is still early in the budget process. Nothing is final, and advisers are likely to add and remove items over the next few months as each department comes to the committee.

The budget is usually finalized in early April.

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