Chris Clegg
One cannot fault the councils in McLennan and High Prairie for recently passing tax incentive polices to encourage development.
But there are some who oppose.
It is said that a stagnant community is one which is dying. In McLennan and High Prairie, the tax burden continues to increase on the few residents and businesses left to pay the bills. It comes to a point where taxes are so high people choose to not move into town. Recent concerns from High Prairie businesses attest to how difficult it is to operate in town.
And, money taken from the residents due to high taxes is less money spent at the existing businesses, which also has a negative effect on the local economy.
The option left is to find a way to encourage growth. The best encouragement a community can do is offer low taxes. People with money (investors) will go where they can make even more money. The fact is, there are hundreds of communities in Western Canada competing for business. It is a cut-throat competition.
McLennan and High Prairie now offer graduated tax incentives.
In High Prairie, owners of residential and commercial properties will now pay zero per cent of the municipal tax portion in the first year, 25 per cent the second year, 50 per cent the third year, 75 per cent the fourth year and 100 per cent the fifth year.
McLennan’s incentive applies to new construction of residential properties and/or renovations to an existing residential property, as well as non-residential properties. Like High Prairie, the break only applies to the municipal portion of taxes. Tax breaks are 100 per cent for the first year, 66 per cent the second year, and 33 per cent the third year, before paying full tax the fourth year.
What is interesting is this may only be a start. High Prairie is considering discounted lot prices.
We have all heard stories of discounted lots being sold like hot cakes. In some cases, it has worked. We only have to look at what happened at Slave Lake 110 kms to the east of High Prairie. The Town of Slave Lake collected over $500,000 in lot sales as of Sept. 30, 2024. The 50 lots up for sale at a discounted price of $10,000 each were all sold. A few months earlier, council recognized they were not selling at $30,000 each and slashed prices.
“All the lots in Phase 1, 2 and 3 have sold,” said Town of Slave Lake CAO Jeff Simpson.
“We have approximately 10 lots in Phase 4 that are larger, some of which may be able to house a duplex if we can sort out the zoning and covenants, which we hope to do in the upcoming months.”
It appears to have worked in Slave Lake. Can it work in McLennan and/or High Prairie?
One has to wonder in how many cases offering cheaper lots did not work but even if it did not, the community would be no further behind. And unsold lot is still an unsold lot. May as well take a shot!
There is a drawback to the tax incentive policy. It was not mentioned at High Prairie council’s meeting but they know it exists. If, for example, a restaurant wants to come into town such as McDonald’s or Boston Pizza, they have a considerable tax advantage over Amiro’s, Boondocks, A&W, Tim Hortons, etc.
In effect, by offering the tax incentive, council is potentially giving an advantage to one business over another but the cold reality is something has to be done to increase business and the taxation revenue or the tax bill rises for existing residents and businesses.
Tax incentives are not perfect but they do tend to work. Lower prices for lots also work.
McLennan and High Prairie are at least trying so give them credit. The other option of sitting back and doing nothing has not worked. The definition of stupidity is doing the same thing over and over again and expecting a different result.