Colwood is following Langford’s lead by eliminating annual business licence fees.
New businesses will pay a one-time fee when they first apply for a perpetual business licence. Existing businesses will be asked to complete an online renewal each year to keep their licence in good standing.
The cost of the licence will be the same as the old annual licences — $50 for a small home-based business, $100 for small commercial, inter-municipal and non-resident businesses and $200 for a large commercial retailer.
Colwood staff estimate the change will mean a loss of about $40,000 a year in annual revenue, but say some of that will be recovered through freeing up staff for other activities.
Colwood Mayor Carol Hamilton said the impetus for the change was a survey of business owners in December. While ratings were high in terms of quality of life and economy, “value for taxes and fees” got lower ratings. “It makes sense,” Hamilton said.
With Langford Mayor Stew Young calling annual business licences “a bureaucratic paper shuffle,” Langford moved to a perpetual business licence fee in 2014. The move was popular, winning the municipality the 2014 Golden Scissors Award from the Canadian Federation of Independent Business.
Langford maintained its decision to reduce the red-tape burden on its small businesses would mean a loss of about $70,000 a year in revenue, but it would save about $40,000 a year on the costs to administer the program.
Colwood’s decision to drop the annual fee comes on the heels of councillors receiving a B.C. Assessment Authority report indicating a $11.5-million loss of business properties assessed values from December last year.
The loss reduced the total business-assessed values to $184.5 million from $196 million — a 5.9 per cent reduction — and represented an $87,524 drop in anticipated revenue to the municipality.
Hamilton supported the change to a perpetual business licence despite the business tax revenue drop, saying the municipality “has to start somewhere” to attract and retain business.
“I think we’ll even out at the end of the day. If we can increase the business fold into the community, that will be a happier place for everyone else,” Hamilton said. “You don’t want to be cutting your nose to spite your face.”
Meanwhile, its forecast that Colwood taxpayers will face a property tax increase for municipal purposes of 3.5 per cent this year. That translates into about $56 on the average assessed value of $435,000.
Victoria Mayor Lisa Helps said Victoria is watching the situation and may consider a similar move in the future.
“We’ve got the business hub open now and they’re supposed to gather feedback from the business community,” she said. “I personally would like to see that happen, but we’ll have to see what the implications are. But good for Langford. Good for Colwood.”