Chamber response to the 2022-2023 budget

Seeking clarification from municipal and provincial government

By Kathleen MacEachern

With the passing of the provincial and municipal budgets, the Halifax Chamber has had time to reflect on our pre-budget submission recommendations and the budget items that either mirror these recommendations or missed the mark entirely. While restrictions have been lifted, and more people are visiting local restaurants and shops, there are still sectors facing a long road to recovery. The provincial and municipal budgets, while setting aside money for some of our most pressing issues, like healthcare and climate change, neglected to focus on the business community, a staple in many of our lives. Over the course of this article, we will delve a bit deeper into the budget items that we support and those that need more clarification or are just in fact, missing.

2022-2023 Nova Scotia Provincial Budget

Supported Items

Expanding Immigration Services and Increasing Funding for Immigration marketing. The Chamber has been a tireless supporter of immigration in Nova Scotia. It is not only a necessity to grow our tax base but also to increase diversity in our province, creating greater variety in ideas, goals, and priorities.

Investment In Housing. The budget outlines $15 million more for affordable housing and $2 million to continue the work of the joint planning task force. These funds will help alleviate housing

supply issues and address some of the affordable housing pressures, but much more tangible action and funding are needed to address the serious housing shortfall in the HRM.

Items of Concern

The Non-Resident Property Tax and Non-Resident Deed Transfer Tax.* The Nova Scotia government has done great work over the past year to create a welcoming atmosphere, encouraging out-of-province residents to relocate here even if those residents were working remotely. These taxes detract from those efforts. This is not the best way to increase our revenue base, our population or address the housing shortage and creates animosity towards non-residents who currently pay property taxes at a rate that already exceeds some residents since their property taxes do not fall under the Capped Assessment Program.

COVID-19 Supports. While the removal of COVID-19 restrictions will aid in the economic regrowth of our business community, for many this won't be a short-term turnaround. Those in the tourism and hospitality sectors are facing an acute labor shortage that will impact their ability to provide the services customers require. There needs to be an investment in activations as well as creative labour solutions. Businesses that will no longer receive federal or provincial resources are facing debt and liquidity issues that could have serious consequences in the short to mid-term.

The Capped Assessment Program. The Chamber has been asking for the review of and subsequent removal of our Capped Assessment Program. The program shifts the tax burden to first-time homebuyers and renters and ultimately reduces the amount of revenue our municipality could be receiving, thus having a direct impact on our commercial taxation rates. There are examples of programs in other provinces that can protect vulnerable populations from significant increases in assessment and should be studied to determine how the CAP can be improved.

2022-2023 Halifax Regional Municipality Budget

Supported Items

Integrated Mobility. The Chamber has been an active supporter of the Integrated Mobility Plan. We are thrilled to see that budget 2022-2023 continues to support the projects that provide safe, sustainable, and accessible travel options. Ensuring individuals and groups can participate in community activities, commute safely and efficiently to work and patronize our businesses will help to restore our economic growth. The Chamber will continue to monitor our transportation options within the municipality, as the lack of transit options to many of our business community locations is often a concern for our members.

Responsible Administration. Each year the Chamber asks the government to look at potential ways to increase efficiency and optimize its size. We are glad

to see that budget 2022-2023 focuses on a fiscal sustainability strategy, service-centered budgeting and reporting, and a corporate performance management program. We hope that these initiatives will help create a more positive and sustainable economic environment for our municipality's growth.

Items of Concern

Taxation and the additional Climate Tax. We know the municipality must invest in green technology, electrify our transit, and upgrade our communities to move forward. These are the facts. But another fact is that many in our business community are still struggling to find employees, secure supplies, and continue operations with a less-than-normal economy and many individuals are struggling to pay rent and buy groceries. The 3% Climate Tax is a permanent addition that many may struggle to pay. We questioned if we have exhausted the federal avenues or approached provincial representatives before placing the burden of climate action on HRM citizens and businesses, who pay over three times the amount of the residential tax rate? We also asked if we have looked at the timeline to achieve our climate goals with the new lens of COVID-19 to determine if now is the appropriate time or whether it will add a greater burden to our business community and residents. With the ever-increasing cost of living and assessments, how will this annual 3% be paid by those struggling today?

Housing. The housing shortage manifested itself during COVID-19 as an affordable housing issue, but in the larger context of economic recovery and future economic growth, affordable housing is only one component of the housing crisis now facing Halifax. Everything on the housing topic, from emergency shelters to market homes, needs to be reviewed to ensure our city has sustainable and inclusive growth. The data has shown us for over 6 years that we would face a housing shortage if something wasn’t done to accelerate development, and this has now resulted in a housing gap of over 12,000 housing units, according to the municipality’s own numbers. It is the Chamber’s belief that although we are approving approximately 4,000 building permits per year, we need to approve approximately 11,000 building permits for new housing units each year for the next five years, just to catch up. We look to the municipality to put the processes in place to ensure this target can be achieved to catch up and reach the city’s own population target, which was recently approved as part of the Halifax Partnership’s new strategic plan.

Final Thoughts

The Halifax Chamber has made communication with governmental and organizational stakeholders a priority over the past two years and will continue to do so as we emerge from COVID- 19. Our recent Provincial 2022-2023 Pre-Budget Submission and municipal submission outlined the asks and recommendations from our membership, and while the budget only reflected a small number of those, we will continue to advocate for a positive business environment for our business community. There are, of course, more issues we could discuss in our budget response, but we would love to continue this discussion with our members.

* Update: The Chamber was pleased that the provincial government reversed their decision on the Non-Resident Property Tax. Due to the hard work and collective voice of our members, the business community, and those that would feel a direct impact, the tax has been eliminated. The Chamber is pleased that the government will listen to feedback and hopes it will ensure consultation on new items going forward.

For our full budget responses, visit the Chamber’s policy library at: halifaxchamber.com/advocacy

Share your opinion on the budget and learn more about our advocacy work by connecting with me directly at: kathleen@halifaxchamber.com.