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Resort Communities making progress: O’Reilly

Taxation issues, financial tools discussed at UBCM It’s been one year since Mayor Hugh O’Reilly brought together representatives from six resort communities in B.C. and asked them to form an association with Whistler.

Taxation issues, financial tools discussed at UBCM

It’s been one year since Mayor Hugh O’Reilly brought together representatives from six resort communities in B.C. and asked them to form an association with Whistler.

In a spirit of co-operation this group, which included Tofino, Fernie, Golden, Rossland, Invermere, Penticton and Whistler, formed the B.C. Resort Communities Association.

After only a year in the works, Mayor O’Reilly said he is pleased with the positive working relationship within the association.

"We’re trying to do a number of things," said O’Reilly after the association’s latest meeting at the Union of B.C. Municipalities conference in Vancouver last week.

"We want to share information, mentor, pass on best practices between ourselves.

"We’re trying to speak with a unified voice in the sense that we’re all communities that share commonalties."

A hot topic at the last meeting was the idea of creating a new tax classification for tourist accommodation.

Currently there is a debate among some property owners about whether their strata-titled condo-hotel properties falls into a Class 1 residential assessment or a Class 6 commercial assessment. The difference in tax rates is significant.

In the past property owners have been able to jump classes and as such get taxed at a different rate.

O’Reilly used the Westin as an example. At one point the Westin was taxed at a Class 6 rate but for one year it was taxed under a Class 1 rate because the parking spaces and commercial spaces were considered individual strata units.

"I think you’d have a hard time telling anybody that’s a residence," said O’Reilly.

"That’s our problem... we’ve had people jumping between classes."

To help get rid of this confusion, the association proposes to use the Class 3 assessment for certain tourist accommodation properties.

"The class is not being utilized so it’s really just renaming it and giving communities some discretion on how it would work best in their community," said O’Reilly.

He said it would be up to the communities on whether they would want Class 3 assessments taxed at a residential rate or a commercial rate. Another option is that they could blend the rates for Class 3.

"Our issue is that each community should be able to make that choice by putting (tourist accommodation properties) in a class, define them as a group that’s unique and different from residential or other commercial," said O’Reilly.

"Then you can set the tax mil rate at a rate which you feel is appropriate in your community and so there’s latitude on where that may go."

The best part of utilizing the Class 3 assessment is that it would create certainty for communities. Having businesses jumping between the classes could cause up to a 15 per cent discrepancy in revenues he said.

"From the municipal perspective it’s one of certainty so that we can make at least some reasonable assessments of what our tax base is and how much we’re going to collect, so that we can budget properly," said O’Reilly.

The mayor said now the association has to gather support and appeal to the provincial government.

"We think it’s a fair proposal," said O’Reilly.

The association also talked about getting financial tools from the government at their last meeting.

"So much is being asked of communities to deliver and we think in particular resort communities are asked even more, and we need something extra to help us," said O’Reilly.

The mayor said it was encouraging to hear MP Paul Martin, the prime-minister-in-waiting, speak at the UBCM last week. Martin vowed to ensure municipal funding is more reliable by giving back a portion of the gasoline tax that the federal government collects.

Currently the federal government collects 10 cents per litre in excise tax on gasoline. The Federation of Canadian Municipalities has requested five cents be turned over the municipalities but Martin said those details have yet to be worked out.

While that’s good news for a place like Vancouver, it’s not so financially appealing to a place like Whistler, with only two gas stations, said O’Reilly.

Whistler’s position has always been that each community should be able to determine their financial tools independently.

"Each community should be able to have some autonomy and I think the key message there is that there should be consultation within the community and agreement on how that comes," he said.

Whistler, which must provide infrastructure for a tourist population as well as a resident population, has been seeking new and innovative financial tools that would reduce dependence on property taxes and fees.

Among the things Whistler has eyed is getting some or all of the real estate transfer tax. Whistler has also studied how many American resorts have their own resort tax, which sees tourists contributing to municipal revenues.

Along with rallying for a Class 3 assessment, the association also agreed to help the provincial government understand the unique needs of resort communities.

In Premier Gordon Campbell’s 2003 Throne Speech he committed to establishing the B.C. Resort Task Force to work with resort communities and First Nations to ensure B.C.’s resort potential is fully established.

The Chair of the Task Force is Minister of State Kevin Falcon, who was also at the UBCM and met with members of the association.

When appointed Falcon said: "The task force will identify and remove barriers to both newly proposed resorts and also existing resorts throughout the province and will play an instrumental role in helping the tourism industry achieve its goal of doubling in size by 2010."

Falcon gave an update of the tourism strategy to the Resort Communities Association at the UBCM and has agreed to deliver an aggressive action plan later this year.

O’Reilly said the association would try to help the province understand needs of resort communities as the province works on the tourism strategy.

Whistler has taken leadership role in the whole process he added.

"Whistler has been very fortunate and gained a lot of insight from our competitors in Colorado, which we’ve done over the last 15-20 years, and a lot of these communities don’t have that same resource to go and visit those communities, so we can share a lot of that information," said O’Reilly.

"There’s a lot of acknowledgement of Whistler’s leadership here."

Though it’s only been a year since the association was formed, O’Reilly said they are making progress.

"There’s real recognition that the province knows that we exist," he said.

Three more communities also want to join the association and have been invited to the next meeting. Those communities are Prince Rupert, Kimberly and Fairmont Hot Springs.