Staff members and some councillors caution against opening a ‘Pandora’s box’ by setting a precedent that other not-for-profits may seek for tax relief

During last week’s committee-of-the-whole meeting councillors supported a motion which would amend the municipal bylaw governing tax rebates for charitable organizations to include the Benevolent and Protective Order of Elks as a “similar” eligible charity occupying land within the residential property class.

If approved by council at their Nov. 14 regular meeting, it would mean a 40-per-cent property tax rebate for local Elks clubs. In 2017, the budget to fund the charitable rebate program is $21,000. If the Elks are included, it would mean an increase of $2,000 in the 2018 budget, bringing the total cost to $23,000. Staff cautioned the addition could open the door to other non-profits to seek the benefit.

Councillor Steve Graham was among those who supported expanding the program.

“There’s a lot of work these clubs do and I understand what you’re saying about offering a rebate to every non-profit, but there are certain restrictions in there,” he said. “These clubs have been around for a long time and have been paying full taxes, they maintain their own buildings, and they do a lot for the community.”

Mayor Robert Quaiff also supported including the Elks in the rebate program. After confirming the Elks addition in the rebate program would add $2,000 to the budget, Quaiff indicated the Wellington Elks alone contribute $10,000 per year to the community.

“I would be in support of offering this extension at this time.”

A report presented to committee last Thursday says both the Picton and Wellington Elks are non-profit organizations and hold properties within the residential property tax class. In order to be eligible for the municipal charitable rebate program, organizations must be an eligible charity as defined in the Income Tax Act and must have a registration number issued by the Canada Revenue Agency. The organization must also own or occupy property within either the commercial or industrial property classes. The Elks currently meet neither of those requirements.

While the majority of committee supported the Elks inclusion in the rebate program, a few councillors, as well as County staff, cautioned it could set a precedent.

Councillor Roy Pennell was among the councillors who voted against the motion.

“I would caution us all on opening a Pandora’s box that may never have a bottom to it,” he said.

Councillor Janice Maynard also suggested councillors be cautious in supporting the motion.

“We all recognize the work and the contributions that our many service clubs provide to the community, it’s just the form of this motion and expanding the charitable rebate program is maybe not the best way to address [the issue],” she said.

She supported a suggestion from councillor Dianne O’Brien that a grant could be a better option.
County director of finance Amanda Carter opened Thursday’s discussion indicating council’s decision on the matter could be precedent setting.

“I just strongly caution council with this decision,” she said. “Should you vote to extend the program, you need to be cognizant of the fact you’re setting a precedent that will allow any not-for-profit to appeal to council for a rebate.”

The staff report says while the 40-per-cent rebate to the Elks would add about $2,000 to the rebate program budget, the larger possible increase is unknown. The report says many other similar non-profit organizations within Prince Edward County could request to be included as a “similar” eligible charity.