City wants to stop tax rebates for owners of vacant buildings

The city is looking to phase out a provincial rebate scheme for owners of vacant buildings that is costing taxpayers $17 million a year.

Provincially run property tax rebate costs taxpayers $17M a year

City council's finance and economic development committee will consider eliminating the vacancy rebate program. (Kristy Nease/CBC)

The city is looking to phase out a rebate scheme for owners of vacant buildings that is costing taxpayers $17 million a year.

The so-called Vacancy Rebate Program, mandated by the province, allows owners of commercial and industrial buildings to apply for hefty tax refunds 90 days after their properties become vacant.

Commercial property owners are eligible for 30-per-cent rebates, while industrial property owners can receive a 35 per cent refund on their property taxes.

Program costs $10M more than city planned for

In recent years, it's been a popular program, much more so than the city envisioned.

The city only budgeted $7 million for the program, but in the last two years received over 900 applications for the rebate each year, worth $17 million. A majority of the properties are in the core of the city, according to the treasurer's office.

But earlier this year, the province announced it would allow municipalities to manage the rebate programs however they liked. However, cities must still formally request a regulatory change from the province by July 1.

Next Tuesday, city council's finance and economic development committee will discuss the plan to reduce the rebate for both classes of property owners to 20 per cent in 2017, down to 10 per cent in 2018 and then to eliminate it altogether in 2019.

A staff report suggests that the rebate is unfair, as it is only applicable to empty offices, stores and industrial buildings, but not to residential ones.

"This is in effect a tax subsidy available to some but paid for by all," the report said.