City of Powell River Council will consider including a $600,000 property tax levy to the city’s property tax stabilization reserve fund to hold down taxes in 2026.
At a special meeting of the city’s committee of the whole on January 14, chief financial officer Mallory Denniston presented a recommendation that staff increase the 2025 levy to include a $600,000 transfer to the 2025 stabilization reserve fund and decrease the 2026 property tax levy by $2.2 million to include a $2.2 million contribution from the 2026 property tax stabilization reserve fund. The recommendation was in relation to draft two of the city’s 2025 to 2029 financial plan bylaw budget deliberations.
Denniston said she was presenting the 2025 completed property assessments roll from BC Assessment, and the next step is to analyze the property assessments. She said the roll is a summary of assessments for the city by property class and it is produced by BC Assessment in early January. For most communities, the completed roll does not change significantly from year to year, she added.
However, for Powell River, the assessment roll has a risk of significant change to the major industry class since the closure of the Catalyst Paper Tis’kwat mill in December 2021.
“As a result, the completed roll is a big piece of the financial planning puzzle, since changes to the major industry class could result in a large and sudden increase in property taxes to the other property classes,” said Denniston.
She said for both 2024 and 2025, the assessment value is 91 per cent residential, six per cent business class and two per cent major industry, and the final one per cent makes up the remaining six property classes. The city’s total assessment roll increased by $86 million, which is a 2.3 per cent increase.
Denniston said there is still much uncertainty around the future value and class of the mill site. She said the site could be removed from the major industry class, pending future dismantling efforts. The type of operation at the site could be changed and no longer qualify as a major industry operation.
“Additionally, the mill assessment could be appealed, which could result in a lower valuation and/or class in 2025,” said Denniston. “Given the minimal change to the major industry property class in 2025, and the risk to its valuation in the future, a transfer to the property tax stabilization reserve fund could be considered in 2025. This fund, established in 2024, aims to smooth out abnormal increases or decreases to the property tax resulting from changes to the major industry class assessment.”
Denniston said the current reserve fund balance is $1.6 million, plus interest. She said the options for a 2025 stabilization reserve contribution to be considered of $600,000, $300,000, or zero, were presented to councillors for consideration in an extensive report.
Denniston stated in her report that the assumption for the 2026 to 2029 property assessment is based on the possible scenario where the mill is removed from the major industry class and revalued as a split class in business and utilities in 2026.
“It is not possible to predict the future, but based on the efforts to dismantle this site since the mill’s closure, this is the best 2026 assessment estimate available at this time,” said Denniston. “Given that this analysis assumes the elimination of the major industry property class in 2026, it is also assumed that the total property tax stabilization reserve fund would be used in 2026 to help offset the resulting tax increases to other property classes.”
Denniston said the advantage of the $600,000 contribution is that it is the smoothest increase in property taxes for a single-family dwelling. She said under this scenario, for an average single-family dwelling, the increase in 2025 would be about $400, or 13.9 per cent, and in 2026, it would be $427, or 14.3 per cent. The disadvantage of this scenario, she said, is that the increases would be higher than the $300,000, or zero-dollar options, in 2025.
Denniston said there is the looming risk of the mill being removed from the major industry class in 2026, which would result in an estimated 19.5 per cent increase for an average single-family dwelling if there were no further contributions to the reserve.
“Staff are seeking direction from the committee on whether to increase the property tax revenue in draft two of the budget to the property tax stabilization reserve, or to not include additional savings in 2025,” said Denniston.
Councillor George Doubt said if council was to adopt the recommendation, it would increase city taxes this year by $600,000 and increase taxation by about two and a half per cent.
“My difficulty is, we have asked for options about the expense side, and we don’t know what that outcome is going to be,” said Doubt. “It makes it really difficult for me to make a decision today, when I know that when staff comes back with the options on the expenditures, we will either have to do something that fits with this recommendation, or reconsider this recommendation. We are getting mixed up with what we are trying to do.”
Doubt said the proposal was to increase taxes this year so that next year, the city can use the taxation stabilization reserve to reduce the increase in taxes in 2026 to a similar rate as in 2025.
“The whole thing is about smoothing the tax increase rate,” said Doubt. “It’s not going to result in tax reductions or a lower rate of increase over the long term.”
After extensive discussion, the committee did not vote for the recommended option from staff to increase taxation by $600,000. Instead, they voted to include an option to increase the 2025 property tax levy by $600,000 to include a $600,000 transfer to the 2025 property tax stabilization reserve fund in relation to draft two of the city’s 2025 to 2029 financial plan bylaw.
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