The City of Castlegar is expected to shift some of its tax burden from businesses onto homeowners starting next year.
It follows a presentation this week to council by city staff about tax rates and classes as well as feedback from business owners who feel they’re carrying too much of the load.
Homeowners currently cover about 40 per cent of the total tax bill, which in 2025 produced $4.8 million. Major industry was responsible for 29 per cent, which came to $3.4 million, and businesses for about 25 per cent, or $2.9 million. The rest was made up by light industry and utilities.
Following a protracted battle in 2009, the amount the Mercer Celgar pulp mill pays was reduced from over 40 per cent of the total bill to less than 30 per cent. The city has since had an informal policy that major industry should pay no more than 30 per cent.
City manager Chris Barlow said it was for council to decide whether Castlegar’s commercial tax rates are too high, but there are several ways of looking at it.
The percentage of taxes covered by Castlegar businesses is higher than in Nelson (24 per cent), Grand Forks (18 per cent), Creston (17 per cent), and Trail (eight per cent). Conversely, Castlegar homeowners pay a lower percentage of taxes than in Creston (74 per cent), Nelson (70 per cent), or Grand Forks (56 per cent), although more than in Trail (26 per cent).
The average homeowner in Castlegar pays a little under $1,500 per year in property taxes, which is a bit more than Grand Forks and Trail, but quite a bit less than Creston and Nelson. As a ratio of business to residential taxation, Castlegar is higher than all of those other communities and higher than the provincial average.
Taken together, Barlow said “you could make the argument that Castlegar’s commercial tax rates are definitely higher than comparables and slightly higher than the provincial averages, so there is some merit to that conversation.”
Barlow asked council if they wanted to shift some business taxation onto homeowners, and if so, how much, over how many years, and when it should start.
Although councillors suggested different amounts and timelines, they ultimately agreed to a mid-range option that will see the city’s business-to-residential mill rate ratio reduced from 3.89 to three over seven years.
“Seven years would be okay, but we won’t start until next year,” councillor Sue Heaton-Sherstobitoff said. “That way we have an opportunity to tell people why we’re doing this in a very public way.”
That also means the incoming council to be elected this fall could reverse the decision. Part of the motion council passed called for tax classes to be revisited annually, in case there are any changes in the overall tax base.
Mayor Maria McFaddin called achieving tax fairness a “delicate balance.” She said she would have preferred to start the shift this year, because she didn’t want to pass the buck to the next council.
Although councillor Sandy Bojechko ultimately supported the shift, she said the flipside of giving businesses a tax break is that homeowners may have less money to spend at those businesses.
Councillor Shirley Falstead, who said she opposes any shift of taxes onto homeowners, was the lone vote against.
City staff are expected to bring back a report to council outlining the exact financial implications of their decision.
The City of Trail has also been discussing a tax shift. Teck, which pays 60 per cent of the city’s overall bill, has asked for that amount to be reduced to 50 per cent over the next decade. Council said no to a break this year but indicated a willingness to continue to discuss the request.
