Prince Rupert mayor requests action on port tax cap as port booms while city stagnates

The City of Prince Rupert plans to take its fight to remove the port tax cap directly to John Horgan. 

During its council meeting on Oct. 3, Prince Rupert Mayor Lee Brain and all six councillors passed a motion to write a letter to the premier and cabinet asking for a decision on the cap's future.

"We need every tool under our belt to collect as many resources as possible, and we need to be able to charge accordingly with these industries that are here," said Brain. 

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The province introduced the cap in 2004 to encourage investment in port properties. It is a hard ceiling on the mil rate, the amount of tax payable per dollar of a property's assessed value.

Currently, the ceiling is set at $22.50 per $1,000 of assessed property value. Not being able to adjust the amount means that as the city's budgetary needs increase, port terminals pay less tax year-over-year as their value decreases with depreciation. 

Tax burden falling on homeowners

At a recent state of the city address, Brain informed residents that Prince Rupert has a $600 million infrastructure deficit for items including roads, wastewater treatment and updates to the local RCMP building. The tax paid by homeowners and small businesses to cover those costs is nearly double that of the capped terminals.

"All capped industries combined are paying about $3.7 million in total tax revenue to the City of Prince Rupert," said Prince Rupert Coun. Blair Mirau. "... The total contribution of homeowners is over $7 million."

Mirau says the cap has limited the ability of the city to determine its financial future. 

"One of the most important roles and revenue-generating mechanisms is property taxes. When the province puts a hard cap on that, they take away our autonomy as citizens to make our own decisions."

A temporary incentive

The cap was intended to be a temporary measure that would expire after five years, but it was extended in 2009 before being made permanent in 2014. During that time, the port in Prince Rupert has grown to become the third largest in Canada. However, the growth isn't reflected in the city's development.

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North Coast MLA Jennifer Rice said she frequently has conversations with investors who assume that the town is booming and are surprised and perplexed to hear about its struggles. 

"The port of Prince Rupert is booming, but the community of Prince Rupert is busting," she said. "... I think a lot of people have not fully comprehended the infrastructure deficit that Prince Rupert is facing because all eyes are on the port."

Rice says she doesn't fully understand why the cap is still in place 13 years after it was originally supposed to expire but removing it just for Prince Rupert could be problematic. 

When asked for a response, the Finance Ministry said that long-term certainty around property taxes is an important aspect of port competitiveness, which is "within the Province's purview."