By Belle Hatfield
On Jan. 24 Yarmouth town council directed staff to look at possible options for council to consider in response to a plea from an area tourism operator for a change in the way tax arrears are managed. Those responses were forthcoming Thursday, Feb. 28, and they didn’t provide much hope of relief for Michael Tavares, president of the MacKinnon-Cann Inn and Function Facility Inc.
The MacKinnon-Cann Inn complex, encompassing several heritage properties along Collins and Willow streets, has been struggling to pay its property tax bills for several years. Tavares told council that the loss of two international ferry services had dealt the company a devastating financial blow, one shared by tourism operators throughout the region. Despite a tax-repayment program that saw the company pay $66,000 towards its bill last year alone, Tavares said the company can’t get ahead of the tax bill, and said the interest the town charges on overdue accounts is the problem.
At last Thursday’s meeting, the town’s CAO Jeff Gushue reviewed a four-page assessment, in which he concluded that the town doesn’t have the authority to develop industry-specific tax collection policies. Surveys of other municipalities determined that the town charges less interest (14 per cent) and allows property owners more time to pay (three years before triggering tax sale proceedings) than most others in the province. It is one of only a couple to offer a tax repayment plan. It charges simple interest on overdue accounts.
Gushue said the intention is that 100 per cent of taxes be collected in each tax year and the interest rate is set high enough to encourage taxpayers to pay on time. He pointed out that the town is not allowed to borrow to underwrite its operations.
“The revenue must come from current taxes or from cash reserves,” he said.
Council also asked Alex Mosesov, from the regional economic development council, to weigh in on the advisability of trying to establish a tourism infrastructure support fund.
In his presentation to council Mosesov said such an infrastructure support fund would act as an industry subsidy and, from an economic standpoint, could not be justified.
“It turns into redistribution of profits from more successful sectors to less successful tourism, thus becomes another political hurdle,” he told council.
Calling the establishment of a support fund as “a purely political process” Mosesov said it was “not an economist’s area of expertise.”
He said if funds were to be raised they would be best used on marketing and promotion of the area as a tourism destination.
At the conclusion of staff presentations, Councillor Dan MacIsaac made a motion to reduce the period the town allows property taxes to be in arrears from three years to two. There was no seconder for the motion.
Tavares was in the audience throughout the presentations. At the January meeting he had proposed a restructuring of the company’s tax arrears, to be paid over five to 10 years, but with no more interest added. He proposed that the deal be contingent on making on-time payment of taxes going forward.
Thursday he was granted another opportunity to address the council at the conclusion of the presentations. He pleaded with council to consider adopting his restructuring plan, not just for his business, but also for others struggling to stay ahead of their taxes.
“It is in the best interests of everyone because no one goes down and you get your current tax bill on time,” Tavares told council.