Budget & Taxes

The Financial Plan provides District staff with clear direction on spending Sparwood residents. It ensures that District staff are accountable to the residents.

The Financial Plan development process begins with strategic planning and includes public consultation, extensive background briefings for Council and comprehensive discussion sessions that culminate in a proposed Five-Year Financial Plan for Council approval. It also includes a number of key budget assumptions. Using this as a basis, work plans are developed for each department, with resource needs identified. Together with the Corporate Strategic Plan, this approach to financial planning provides for a thorough, strategic focus in the budget deliberations.

Download the Five-Year Financial Plan or contact the Finance Department at 250.425.6271.

The District of Sparwood, the City of Fernie, the District of Elkford and Area A of the Regional District of East Kootenay have an agreement that shares the property taxes levied on the industrial coal mining properties in the Elk Valley. This agreement was effective March 31, 2008 for a twenty-five year term.

All properties with a Class 4 industrial assessment that are coal mines, coal processing works or coal related infrastructure that are located within the confines of the RDEK Area A will be subject to the agreement. If an identified property is outside the existing boundary of a municipality in this area, a municipality will apply for a boundary expansion to be able to tax these properties as part of the agreement.

Since 1983, Elkford, Fernie and Sparwood have participated in an Elk Valley Industrial Tax Base Sharing Agreement. In 1991, the tax levy from this agreement was “frozen” and each community had received essentially the same property tax revenue from the mines since 1991, with the exception of Elkford, which received a small increase beginning in 1995 to service IDSA debt. The tax requisition to Sparwood had not increased since 1984 – the increases between 1984 and 1991 were distributed to Elkford and Fernie.

The reliance on the industrial taxes from the coal mining industry is in part due to the fact that the Elk Valley communities are the product of the coal mining industry. Diversification of the economy of the Elk Valley has been slow. The City of Fernie, incorporated in 1904, has experienced many boom and bust years associated with the coal mining industry. Sparwood grew from the relocation of the coal mining towns of Natal and Michel in the 1960’s. Fording Coal constructed the town of Elkford in the 1970’s to house their employees. The major recreation services provided in Sparwood and Elkford were developed through significant contributions of both volunteer time and financial resources by employees, local mining unions and the companies that owned the mines. The reliance on the industrial taxes to support these services is significant considering each community’s limited ability to diversify their taxation base. As such, the “quality of life” amenities that the local governments provide for the employees of the mines are directly related to the taxes paid by the mining industry.

Prior to the original tax sharing agreement, the letters patent of the three municipalities provided to each municipality the assessment for one or more of the separately owned mines. The industrial mine taxes under this scheme varied significantly in each municipality, and left some of the mines in a less competitive position than neighbouring mines. The tax sharing agreements levy the same rate on each mine, and the taxes collected are then divided amongst the local governments.

The original agreement based the division of the taxes on a formula that considered the number of mine employees residing in each municipality, the assessment base and the per capita expenditures of each municipality. The 2008 agreement allocates the taxes by a fixed percentage to each local government; the percentage allocation was determined by the level of each local government’s dependence on the mines and their ability to diversify their assessment base.

The 2008 agreement had three primary changes that impacted the local governments. The first was that the base property tax levied on industrial coal mining properties increased from $6.9 million to $8.9 million. The second was that the base amount of $8.9 million will be adjusted annually for inflationary effects. The inflationary adjustments will be the lesser of a) the average annual tax change to residential properties or b) the BC CPI index, excluding food. The third major impact was that all properties with a Class 4 industrial assessment that are coal mines, coal processing works or coal related infrastructure that are located within the confines of the RDEK Area A, are subject to the agreement. If an identified property is outside the existing boundary of a municipality in this area, a municipality will apply for a boundary expansion to be able to tax these properties as part of the agreement.

These changes also impacted Teck Coal. Firstly, the tax burden was increased by $2 million. Secondly, the tax levy is adjusted annually for inflationary effects. Thirdly, additions and deletions of industrial properties will not automatically adjust the amount of base taxes for the pool. Adjustments to the base taxes due to property additions and deletions must be renegotiated amongst the local governments. Lastly, the inflationary adjustments will be limited to a reasonable inflation factor. This provides the industry with protection from large property tax increases; which is a protection not provided to other taxpayers. The agreement was amended in 2009 to include additional properties as a result of the boundary extension applications submitted by the Districts of Sparwood and Elkford.

Property taxes generally pay for local government administration, staffing, debt servicing, leases, and the costs to provide services to the community.

Municipalities have authority under Part 7 of the Community Charter to tax property owners. The taxes collected in Sparwood are used to provide services, such as:

• Water systems;
• Wastewater (or sewer) systems;
• Parks and trails;
• Garbage pickup;
• Snow removal;
• Fire protection;
• Road and sidewalk infrastructure;
• Recreation programs and services; and
• Bylaw enforcement.

Property taxes in Sparwood are calculated on the basis of the market value, or “assessment”, of land, improvements or both (i.e. house, barn, garage, yard) and the municipal “tax rate”. The District calculates taxes using the variable tax rate system where tax rates are based on a dollar figure per $1,000 dollars of assessed property value. For example, if we were to use the 2016 Tax Rates, the property taxes payable on a residential property valued at $300,000 would be $1,164.87  (e.g. 3.8829 tax rate / $1,000 x $300,000 = $1,164.87).

Tax rates differ between municipalities and may vary depending on the “class” of property. The District sets their annual tax rates based on the revenue needed as set out in our financial plan.

There is another kind of property tax called a “Parcel Tax”   

Parcel taxes are often used instead of, or in conjunction with, user fees to recover the costs of providing local government services. They can be levied on any property that has the opportunity to be provided with a service regardless of whether or not the service is being used.

A parcel tax can be imposed on the basis of a single amount for each parcel, the taxable area of a parcel, and the taxable frontage of the parcel. The bylaws required to establish a parcel tax scheme must identify the service, state the basis and specify the years for which the tax is imposed. In addition, they must establish how the taxable area or the taxable frontage of a given property is determined. A local government must make available to the public, on request, a report respecting how the amounts or rates were determined.

A special assessment listing, or roll, must be created before a parcel tax can be imposed. This roll lists the parcels to be charged and includes the name and address of the owners of each parcel. Once it has been completed, the roll must be available for public inspection. If requested by an owner, the local government must omit or obscure the address of the owner or other information about the owner to protect their privacy or security.

A review panel must be formed by the local government to consider any complaints about the roll and to authenticate it. A person can make a complaint to the panel on the basis that there is an error or omission with regard to a name or address, the inclusion of a parcel, the taxable area or frontage, or that an exemption has been improperly allowed or disallowed.  Owners are sent a notice of the date set for the sitting of the review panel the first time the tax is imposed on their parcel. In following years, the sitting of the panel is advertised in two consecutive issues of a local newspaper.

A parcel tax can only be applied to properties that receive a particular service.  In Sparwood, the following parcel taxes are currently collected:

• Sewer and Water Reserve Replenishment Parcel Tax Bylaw 1092, 2012. This tax was established to provide additional money within the water and sewer reserve funds to finance future water and sewer line replacements. A review of the tax amount is scheduled every 3 years and the term may be extended if it is determined to be necessary.
• Michel Creek Road Water Extension Local Service Area Parcel Tax Assessment Roll Bylaw 1122, 2013. This project extended water service to the Michel Creek Road area. The parcel tax is based on taxable area and will be completed in 2037.

Every property owner in the province must pay property taxes unless specifically exempted by provincial statute. Statutory exemptions are listed in both the Community Charter and the Taxation Rural Area Act. These properties include, but are not limited to:

• Schools and universities;
• Public libraries;
• Places of public worship; and,
• Hospitals.

Under the Community Charter and the Local Government Act, the District of Sparwood may grant permissive tax exemptions which exempt certain properties from taxation for a specified period of time. The properties that are exempted in Sparwood are listed in the Permissive Tax Exemption Bylaw.

Effective 2021 – New Homeowner Grant Application Process

The home owner grant is available to eligible homeowners who pay property taxes.
Effective 2021, homeowners in municipalities no longer apply for the home owner grant through their municipal office. Everyone applies directly to the province using an online system that’s easy to use.

Click here for more information on the Home Owner Grant application process.

Your property assessment significantly influences the amount of property taxes you pay

You will receive your property assessment notice from BC Assessment each year in January. Your property is assessed to determine its:

• Value;
• Classification;
• Exemptions (if any apply).

In most cases, the value is an estimate of your property’s value as of July 1 of the previous year. To determine the value of your property, an assessor compares your property to actual sales in the same area.

Some of the characteristics the assessor compares are:

• Location;
• Size;
• Land surface (topography);
• Shape;
• Use;
• Age and condition of buildings.

Concerns about your assessment?

If you notice an issue or have a question about your property assessment, contact BC Assessment to discuss your concerns. If your concerns are not resolved, you may file a Notice of Complaint to appeal your assessment. Appeals must be made prior to January 31. If you appeal, once a decision is made your property taxes may change; this change may result in either a tax decrease – you may qualify for a refund if you paid a higher amount of property taxes or a tax increase – you will pay a higher amount of property taxes.

Didn’t receive your property assessment?

If you did not receive your BC Assessment notice in the mail by mid-January, contact us and we can update them with the correct mailing address.

Questions?

BC Assessment has some great information on their website including Frequently Asked Questions and the video below details how property taxes are determined using property assessments.

The formula for calculating taxes on property is tax rate times assessed value

The BC Community Charter sets out in detail the regulations for property taxation. The amount of money to be raised through taxation is set by Council through the budget process. Council adopts a Property Tax Rate Bylaw by May 15 each year. A letter from the Mayor is included with your tax notice outlining how your tax dollars are being spent is included in your tax notice.

Municipal Tax Rates

Municipal tax rates are set annually by bylaw. The level at which the tax rates are set is largely dependent on the District’s operational requirements as dictated by service levels, planned capital expenditures and debt repayment. Once set, municipal tax rates are applied to the assessed value of a property, as determined by BC Assessment, to calculate the municipal tax payable.

Other public agencies also require revenue for the services they provide to the residents of Sparwood. Each public agency with taxing authority sets a budget for the amount of tax revenue it requires. Tax rates vary among agencies and are calculated by dividing the revenue requirements of the agency by its assessment base. The resulting tax collection for the other agencies is subsequently remitted to the respective agency and is not retained by the District for its own use.

Utility Billing and Tax Collection

The Finance Department controls and supervises the District’s financial affairs. This includes the billing and collection of taxes and utility charges, as well as all other monies paid to the municipality, and the implementation and maintenance of the appropriate financial systems and safeguards to manage expenditures, payroll and benefit administration.

In addition, the Finance Department plays the lead role in developing and articulating the long term financial plan and related initiatives. The Department also provides a stewardship role with respect to Municipal assets, performs treasury functions, and reports on a wide array of financial matters to ensure accountability and clarity in all Municipal business.

A considerable amount of resources are invested annually in the preparation, delivery and filing of the five year financial plan, audited financial statements and statutory reports. In its capacity as the custodian of financial systems. the Finance Department provides internal support for all departments and financial advice and guidance to Council. The Department also participates in developing and supporting corporate initiatives such as strategic planning, human resources, risk management and information systems. 

The tax sale is a public auction of properties within a municipality which have outstanding property taxes from two years prior to the current year

In accordance with the Local Government Act, the District of Sparwood conducts the annual tax sale the last Monday in September by offering for sale by public auction each parcel of real property on which taxes are delinquent. 

The following notes are intended to provide a general outline of the tax sale process:

• The District of Sparwood will advise if it has an interest in one or more of the properties and if the municipality will be bidding on those properties.
• The District of Sparwood makes no representation express or implied as to the condition or quality of the property(ies) being offered for sale.
• Prospective purchasers are urged to inspect the properties and make all necessary inquiries to municipal and other government departments, and in the case of strata lots to the strata corporation, to determine the existence of any bylaws, restrictions, charges or other conditions which may affect the value or suitability of the property(ies).
• The final determination as to the successful bidder will be made by the Collector who will keep a sales record which shall be conclusive in all respects as to each sale.
• If no bid is received at or above the upset price, the municipality is deemed to be the purchaser.

Advertising Requirements

The Local Government Act also requires the District to publish tax sale information in at least two editions of the local newspaper with the last advertisement at least three, but no more than 10 days before the sale. 

• The legal description and street address of the properties for tax sale must be published.
• To avoid your property being listed in this ad in the newspaper, your delinquent taxes must be paid approximately 2 weeks prior to the Tax Sale date.

Bidding On and Purchasing a Property

• The announced upset price is the minimum price acceptable and will be the starting point of the bidding on each property.
• The auction will be conducted with three calls on the final bid.
• A bid, by any person, will be deemed to be conclusive proof that the person has made himself acquainted with these terms and conditions of sale and has agreed to be bound by them.
• The highest bid above the upset price will be accepted.
• Any person, upon being declared the successful bidder, must provide their name and address and pay in cash, money order or certified cheque in a minimum no less than the upset price. Failure to pay this amount will result in the property promptly being offered for sale again. Any balance must be paid in cash, money order or certified cheque by 3:00 p. on the date of the tax sale. Failure to pay the balance will result in the property being offered for sale again at 10:00 am the following day.
• In the case of a property subject to the Strata Property Act, the purchaser may be responsible for the payment of any outstanding strata fees and charges which must be paid to the strata corporation prior to conveyance of the property.
• The purchase of a tax sale property that is not redeemed is subject to tax under the Property Transfer Tax Act on the fair market value of the property at the end of the one year redemption period.

Notifying Charge Holders

The Collector is required by law to search all property titles and within 90 days after Tax Sale, notify all registered charge holders shown on each property.

Rights During the Redemption Period

• The current registered owner(s) may redeem the property within one year and still has the right of possession during the one year redemption period.
• The tax sale purchaser has a right to enter the property to “prevent waste” and is recommended to obtain legal advice before exercising such right.
• If the property is redeemed, the purchaser is entitled to all amounts paid plus interest as set by the Province of BC. Refund interest is calculated on the purchase price of the property, not the upset price.
• Refund interest paid to a tax sale purchaser due to the redemption of a tax sale property is considered to be taxable income pursuant to the Income Tax Act and therefore the tax sale purchaser may accordingly receive a T5 slip.
• If the property is not redeemed after one year, the property will be transferred to the tax sale purchaser free and clear of all mortgages, charges, liens, etc. except those imposed by a senior government (Province of British Columbia, Government of Canada).