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Victoria churches, charities fight to keep tax exemption

Church, social-service and recreation organizations will plead their case to Victoria city councillors tonight in an effort to maintain their property-tax exemptions.

Church, social-service and recreation organizations will plead their case to Victoria city councillors tonight in an effort to maintain their property-tax exemptions.

Late last year, councillors decided to phase out almost $300,000 in municipal tax forgiveness granted to 21 grandfathered properties owned by organizations such as the United Way of Greater Victoria, the Canadian Cancer Society and the CNIB.

The change would reduce the tax exemption for the properties from 100 per cent to 50 per cent, bringing them in line with current city policies.

“The issue comes up every four to five years,” said Coun. Chris Coleman, chairman of the council committee investigating the changes. “We need to understand the impact the changes will have on the delivery of social services in town.”

Coleman said the move is not about raising revenue for the city but sharing the tax burden more fairly.

“When we choose to give a permissive tax exemption to an organization for the good work they do, it’s the other taxpayers who pay their share,” Coleman said.

Councillors also have agreed to adopt a commercial-activity definition in the tax-exemption policy.

About 55 properties with portions used principally for revenue generation — such as thrift stores or church parking lots rented at commercial rates — would lose a share of their tax exemptions. The change, which would total about $256,000, would take effect next year.

The proposed changes would have a major impact on the affected non-profit organizations, but a minimal impact on the city’s budget, said Multiple Sclerosis Society executive director Todd Abercrombie and board chair Alex Milne in a letter to council.

They said they were relieved when council abandoned similar tax changes in 2006.

The impact on the MS Society would be at least $28,000 annually after the proposed 10-year phase-in is completed, Abercrombie and Milne wrote.

“This ‘annual fixed cost’ amount would have to be paid for out of our $1.1-million operating budget and if we couldn’t cover it with increased fundraising, we would be looking at reducing the programs and services we offer to our clients.”

Aside from the $56,000 property-tax exemption and a $110,000 B.C. Gaming Community Grant, the MS Society does not receive any government funding, they said.

“By granting this tax exemption, the city is recognizing the valuable work that [non-profit organizations] perform for the greater good of our society.”

Gordon Burton, treasurer for the Central Baptist Church, said changing the tax structure on the church’s Pandora Avenue parkade would have a severe impact.

While the parkade, completed in 1998, generates significant revenue, expenses — especially for security, which costs $40,000 a year — are high, he said in a letter.

“When the parkade was completed in 1998, there was no need for security. Break-ins were unheard of. This all changed when Our Place [street community drop-in] was constructed in the 900-block of Pandora. We quickly realized that volunteers were unable to control the break-ins and that full-time coverage was essential,” Burton wrote.

He said parkade revenue was $105,000 in 2012, while direct costs were $55,000 (excluding mortgage payments, of which the parkade is a significant chunk). “Any amounts that are left are quickly used to generate the ministry that we do as a downtown church. Imposing a tax of almost $25,000 on our parkade would significantly reduce our ability to do neighbourhood outreach.”

Coleman agreed there’s a cost to some organizations to operate in the downtown. And he said the city would lose out if some of those services — such as parking provided by a church — were relocated for tax purposes.

“This is a much more complex discussion than it appears to council at first blush. So I look forward to having people come and share their thoughts with us. I don’t think the discussion is finished.”

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