Pictou County faces the 'new normal' as big companies seek lower tax bills
'It's very legitimate to be concerned about the drop in assessment,' says Pictou Chamber of Commerce member
The Pictou County amalgamation vote is over, but local governments still face the economic squeeze as two of the area's largest employers have secured, or are seeking, lower municipal tax bills.
Tire manufacturer Michelin is in the midst of a two-year reduction in its commercial assessment that will see its annual municipal taxes drop by $300,000.
"That's a lot," said Deputy Warden Andy Thompson. "The decrease in assessment in the county is the new normal."
Drop in plant's assessment
In 2014, the French tire giant cut production and laid off several hundred workers at its Granton plant. It then approached the provincial assessment agency — Property Valuation Services Corporation — and successfully argued that its commercial assessment should be reduced.
"In late 2015 we finalized discussions with PVSC, which resulted in a two-year tax reduction in value for this site," Michelin spokeswoman Deborah Carty said in an email to CBC.
In 2016, the plant assessment dropped from $39 million to $33 million. Next year, the plant will be valued at $28 million.
Growing tax burden on residents
The Municipality of Pictou County has been shifting more of the tax burden onto residents, who now bear 75 per cent of taxes. That's up from 69 per cent several years ago.
"It's not going to get any better. No new Michelins, Sobeys, Northern Pulp, or Scotsburn Dairy are going to be here," said Thompson.
He estimates the loss in taxes is worth about three cents on the per-$100 tax rate, which currently stands at 81 cents for residential.
The county has already depleted its reserves in an effort to hold the line on taxes.
It's happening in Stellarton, too
It's not just the county. In the Town of Stellarton, headquarters of Sobeys, the grocery giant has appealed the commercial assessment of several of its local properties.
A decision is expected in about a month. The company says the appeals are routine. It declined to identify the properties where it is seeking lower taxes or why.
"It's all a matter of due diligence on the part of the business," Sobeys spokeswoman Shauna Selig said in an email to CBC News.
Selig says Sobeys has 1,100 people working in its offices.
Concern is 'very legitimate'
Jack Kyte of the Pictou Chamber of Commerce agrees assessment appeals are a regular part of business, but he says what's happening is a "huge hit" to municipal taxation.
"I think it's very legitimate to be concerned about the drop in assessment. It's not going in the right direction," he told CBC News.
On Foord Street in Stellarton, workers are renovating a large building that used to be part of Scotsburn Dairy before it was sold to Saputo. In 2012, the building was assessed at $813,000, which dropped to $296,000 in 2016. In April, it was sold for $60,000.
"That underlines the problem in rural Nova Scotia where a lot of properties are getting older and the value is getting less," Kyte said.
A short distance away in Stellarton's industrial park, the one-time home of manufacturer Clairtone has seen its value go up, but for how long remains to be seen.
Vida Cannabis wants to turn the building into a medical marijuana grow operation, but it has yet to receive a licence from Health Canada. In the meantime the company has appealed the property's $3.8 million commercial assessment.
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