Grey County is calling for the elimination of a program that provides a property tax rebate of 30 per cent for vacant commercial properties and 35 per cent for vacant industrial properties.
On Thursday, county council supported the elimination of the Vacant Unit Rebate Program and recommended that the county’s local municipalities pass bylaws to eliminate the rebate, which cost the county more than $35,000 in 2019. That year the program also provided rebates of more than $83,000 in education taxes, while it cost Grey County’s local municipalities just over $123,000 in tax dollars, for a total of about $242,000.
And Owen Sound, by far the municipality most affected by the program, has already started the process to eliminate the rebate. Later Thursday, the city’s corporate services committee passed a recommendation asking city council to direct staff to bring back a bylaw to eliminate the city’s vacancy rebate program. The move would save the city about $110,000 annually beginning with the 2022 operating budget.
“We kicked it down the road a bit until we got the bridge done, giving downtown Owen Sound businesses a break,” Owen Sound Mayor Ian Boddy said Thursday evening.
“We figured with the way the economy is right now it is pretty good, it makes sense to do it now, plus we have been reducing the ratios for commercial and industrial the last number of years to get it down anyway.”
Owen Sound discussed scrapping the rebate back in early 2019, but voted 5-3 to delay making a decision on the matter until after the replacement of the 10th Street Bridge was complete. Staff had recommended eliminating the program as of Jan. 1, 2019, while 90 per cent of respondents to a survey also supported the move.
But in 2019 there was some concern that construction projects in the downtown area, including the bridge replacement and the Downtown River Precinct work, would create plenty of hardships for downtown businesses and make it particularly difficult to fill empty commercial buildings.
The first phase of the river precinct was completed in 2019, while the new bridge, to be dedicated as the Gitche Namewikwedong Bridge on National Indigenous Peoples Day on June 21, opened to traffic late last year.
Grey County Director of Corporate Services Kevin Weppler said Thursday that the rebate has become increasingly problematic for a number of reasons, including properties remaining eligible for years at a time, properties securing rebates after receiving assessment reductions and difficulty around criteria enforcement.
According to a report from Weppler on Thursday, the rebate program was created in 2001 as a short-term aid to property owners in difficult times, but has continued.
In 2017, the province reviewed the program, which resulted in them giving the lower tier municipalities the opportunity to tailor the programs to best suit their needs, such as phasing out the program, altering percentages, and excluding certain property types. Any changes were to be co-ordinated with the upper-tier municipality. At that time, the majority of municipalities that pursued changes, opted to abandon the rebate, Weppler said.
The province itself has also opted to eliminate the rebate, reducing the percentages used by 50 per cent for education in 2019, and ending the program as of 2020.
Weppler said in his report that the county had intended to coordinate the process to end the rebate on the recommendation of finance staff from the lower-tier municipalities in late 2019, but the decision was made to delay that process when the COVID-19 pandemic hit.
Then in December, the province passed changes to the Municipal Act providing local municipalities the ability to pass a bylaw eliminating the rebate or to change the rules.
Boddy highlighted that the rebate program only applies to vacant commercial and industrial properties and does not apply to residential units in any way.
“A rebate is up to 30 per cent of commercial,” said Boddy. “For a downtown building, if it is residential upstairs, residential gets taxed differently so it wouldn’t be a 30 per cent decrease on the whole building, just on the commercial part.”