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Campbell River endorses new tax exemptions for churches, charities and non-profits

Under the new system, 32 organizations would not have received full exemptions this year
The City of Campbell River has revamped its decision making matrix for how it determines tax exemptions for non-profits, churches and charities in the city. Black Press File photo

Local non-profit organizations and community groups will soon be seeing a change to the way the City of Campbell River determines permissive tax exemptions (PTEs).

Past practice was for the city to grant a 100 per cent municipal tax exemption to organizations which submitted an application that met the standards set out by the city’s Council Finance Policy. Exceptions to that 100 per cent PTE were limited to when organizations were not open to all members of the public or used part of their property for commercial purposes.

But because the exemptions are in place to recognize the value that the organizations provide to the people of Campbell River, it was decided that there should be a change to a more merit-based type system for determining tax exemption eligibility and the percentage of taxes that a particular organization would have exempted.

“Members of the committee felt that it was inequitable to award all applicants the same exemption when the quality of applications and the overall perceived impacts to the City of Campbell River varied significantly between applicants,” according to the report that was submitted to city council March 8. That report also contained a new proposed “scoring matrix” that will be used to determine PTEs going forward.

“The new scoring methodology would still be based on Council Finance Policy, but would aim to quantify the overall score of each application in a systematic manner,” the report says. “The committee discussed at length each of the application criteria, and then assigned a point value to each criterion based on the committee’s belief of its overall importance.”

The weighted system now asks the committee to score each application based on questions like whether the organization’s activities compete with licensed businesses within the community, the annual budget of the organization in relation to the size of the tax exemption they are seeking, the thoroughness of their financial statements and an assessment of how the organization and/or its property benefit the community as a whole.

In running through the 2020 PTEs that were awarded last year to show how the new scoring system would have effected the last round of exemptions – would it have been in place during last year’s considerations – showed that 32 applicants would have received a less than full exemption.

“The results applying the new scoring methodology were that the total value of PTE’s awarded for 2020 would have been approximately $58,000 less than what was actually awarded,” the report states, admitting that organizations that were previously fully exempted will be financially impacted by the new system.

“While the impact of the changes to the scoring methodology do not result in a significant amount of new revenue to the City of Campbell River,” the report says, “it is anticipated that organizations who have received full exemptions in the past could face challenges with now having to pay a portion of taxes.”

It also states, however, that council does have the discretion to increase the amount of exemptions granted after the applications go through the new system, as well, saying, “while under the new scoring system a number of organizations would receive a reduced PTE, Council has the final approval and could alter amounts awarded as they see appropriate.”

The new methodology was endorsed by council and will be put in use for the 2022 fiscal year.

RELATED: Questions surround tax breaks for Campbell River non-profits

RELATED: City to look at ‘weighted system’ for tax exemptions for churches, charities

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