Non-profit worried Glace Bay youth centre will come with unaffordable tax bill

New Dawn Enterprises is grateful for a federal-provincial infusion of millions of dollars into the new youth facility that's about to get built in Glace Bay, N.S.

But the non-profit agency says the investment comes with an unintended consequence.

The brand new building will dramatically increase the property value and, as a result, the municipal taxes.

"It puts you in a very precarious position," said New Dawn vice-president John Whalley. "So you go into this property development — a large development, $16 million — and you could be facing a tax bill of half a million dollars a year. Not a good place to be in."

New Dawn is already appealing to the Nova Scotia Utility and Review Board to have the assessed value of its Eltuek Arts Centre in downtown Sydney reduced, saying it can't afford the tax bill.

In that case, the federal and provincial governments put in $10 million and New Dawn added about $7 million to cover renovations on the former Holy Angels high school and the former Sisters of Notre Dame convent.

For the new Glace Bay Youth and Family Centre, the federal and provincial governments are contributing $15 million and New Dawn is putting in about $1.5 million. 

On Wednesday, New Dawn CEO Erika Shea said ground is expected to break on that project any day and construction will follow.

Whalley said the provincial assessment and tax system puts non-profits at a disadvantage because many don't have the capital to invest and don't have the operating funds to cover the increased taxes.

He said Cape Breton Regional Municipality has provided New Dawn with a tax break on its arts centre, but that, too, is precarious because they have to apply every year.

Whalley said CBRM is not hostile toward the arts centre, but it hasn't been supportive.

Mayor Amanda McDougall rejected that, saying the municipality has been supportive, but it doesn't assess properties.

That is done by the Property Valuation Services Corporation (PVSC).

Municipalities can offer tax breaks to non-profits for properties that are conducting non-profit activities, McDougall said, but in New Dawn's case, some of their activities are also for profit, so its tax breaks are not across the board.

The solution lies in changing the Municipal Government Act or the Assessment Act, but those are a provincial responsibility, the mayor said.

"I think there is opportunity to have those conversations with the province. Unfortunately, municipalities don't have any say over assessment. We simply set our tax rates, and assessments are done by PVSC."

McDougall said she and CBRM staff have regularly discussed the issue with New Dawn and she has reached out to the Municipal Affairs Department for advice on what other kinds of help CBRM can provide.

Youth facility qualifies for some tax exemption

As for the Glace Bay youth facility, McDougall said the building will qualify for some tax exemptions. But if it leases out space in competition with local rental property owners or sets up a café that competes with local restaurants, CBRM can't give New Dawn a tax break that's not available to other taxpayers.

In an email, Municipal Affairs spokesperson Heather Fairbairn said the department has advised CBRM that the Municipal Government Act allows them to offer tax exemptions to charities and non-profits that provide a service that might otherwise be a municipality's responsibility.

She said they also do not have to review the exemptions each year.

While the department appreciates that non-profits may be affected when their property values increase, no legislative amendments related to property values for non-profits are being considered at this time, Fairbairn said.

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