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Local governments finance tax-share study

A $17,500 report is being commissioned by two local governments, which hope its recommendations will help bring provincial tax dollars collected from resource-based industrial projects back to the northwest.

With foreseeable stresses to local infrastructure and services due to an increase in project-related workers here, the report will serve as a tool local governments can use to lobby the province.

The Regional Revenue Sharing Program is being commissioned by the City of Terrace and Regional District of Kitimat-Stikine and it ideally will travel with locally elected officials to a fall Union of British Columbia Municipalities (UBCM) convention where lobby efforts will take place.

The report is being commissioned from consulting firm Harris Palmer.

The intent behind seeking a share of provincial tax revenue leveraged from

regional industry is to help ease the financial burden an increasing population will pose on municipal purses, especially with resource-based industries being located outside city boundaries.

Similar to what is being sought, northeastern B.C. currently has a fair-share program where municipalities and regional districts collected $35.3 million from oil and gas sector tax revenues this year.

The report commissioned will argue a business case for why a fair-share program should be in place here, said Terrace Mayor Dave Pernarowski.

“We’re only talking about looking at new development,” he said, noting the province already plans how to spend the tax revenues it is already earning.

“This is not a tax grab,” Pernarowski continued.

“It’s more about making sure that as those dollars flow in, some will remain in the communities being impacted,” Pernarowski said.

Once complete, the report will identify ways the province can share new revenues with northwestern local governments.

“We feel it would be very beneficial to have an actual document,” said Pernarowski about arming efforts  with a report. “It’s really less administration for the province if you look at it from their side.”

The city and regional district have teamed up to create a stronger regional negotiating voice.

“It’s more effective if we come in as a region,” said Pernarowski.

The $17,500 cost of the document will be split between the City of Terrace and the regional district, and should a $5000 grant come through from Northern Development Initiative Trust, that amount will be subtracted from the total amount.

The city was initially approached by the Kitimat Terrace Industrial Development Society (KTIDS) and Terrace’s Economic Development Authority  (TEDA) with the idea to create a document, said Roger Harris, partner of Harris Palmer and one of directors of KTIDS.

“We moved on it quite quickly,” said Pernarowski, adding it fell in line with a motion submitted by the city to UBCM advocating a share of tax revenues. “Timing was important.”

The proposal was dealt with in a private meeting with council as it was a business matter being discussed, said Pernarowski.

“The overall goal is really to identify the kinds of things that you could attach revenue sharing to,” said Harris, “and then look at it in the context of what’s going on in the northwest today.”

Harris explained that having a document like this is strategic.

“If (the province) is saying ‘no’ to us, the no is because it’s not the political will to do it, not because (the province) can’t,” said Harris.

The pitch included areas of research that will be needed for a strong case. They include five things.

First,  a  review of provincial revenue sources outside of personal and corporate tax.

Second, a review of how the province distributes some of its revenues to local governments, regional districts and First Nations.

Third, an analysis of revenue sharing programs in place provincially and nationally.

Fourth, identifying current and planned business expansion in the northwest with a focus appropriate projects or sectors for a revenue sharing program.

And finally, recommendations and rationale for sharing that could be presented to the province.

Pernarowski said Harris Palmer comes with good credentials, and a repertoire of work already including northwestern agencies and businesses.

Harris was Liberal MLA for the Skeena riding until 2005, where he was defeated by NDP MLA Robin Austin after one term in office.

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