The Village of Burns Lake council let the Legion off the commercial tax hook…starting two years from now.
Royal Canadian Legion Branch 50 got stuck paying commercial-level taxes, this year, because they had to change their liquor license to be compliant with provincial food and beverage regulations. Doing so triggered the Village of Burns Lake’s commercial tax rate, because liquor primary licenses connote a premise being a business. Not so, in the legion’s case, they are a not-for-profit entity, but a bill for about $2,500 was nonetheless dispatched to the decades-old veterans’ organization.
The legion pleaded its case to town council in January. They were doing nothing differetly after the liquor license clarification than they were doing before, said their contingent of treasurer Jeanne Parkinson and president Robert Winning.
Council agreed and came back on Feb. 14 and voted unanimously to spare them from the tax.
But wait.
This was the motion on which they voted:
“That Council amend the Permissive Tax Exemption Bylaw No. 1026, 2020 to include a full exemption for the Class 6 assessed land and improvements of the Royal Canadian Legion Branch #50 for the years 2024-2025.”
Everyone at the table voted in favour of this option (three other options were also on the suggestion list for half-off, a 25 per cent discount and no discount) for complete tax forgiveness.
Did you catch the date? Not all councillors did, the Lakes District News was later told, anonymously. The date of effect was 2024-25. OIn other words, the Legion still has to pay full taxes this year and next.
“When the five year 2020-2025 Permissive Tax Bylaw was adopted the Legion was no longer included as exempt because the Royal Canadian Legion Branch #50, that used to serve only veterans and their guests, had applied for and been granted a Liquor Primary license. Which means it now operates as a business that is open to the general public,” said mayor Henry Wiebe. He added, “For years 2022 and 2023, the Royal Canadian Legion Branch #50 was not included for permissive tax exemption and the Village does not have the authority to back track the bylaw. They were taken off because the application and subsequent approval for a Liquor Primary License changed the nature of the organization.
No error was made, the change in the liquor primary license triggered a change.”
Furthermore, said Wiebe, “Moving forward, council has the authority to assess whether Royal Canadian Legion Branch #50 meets the criteria laid out in Section 224 (2) of the Community Charter. After the presentation and request from Branch #50 staff, Council choose to direct staff to amend the bylaw. As noted above, we can only move forward, there is no authority to go back. The presentation painted a different picture from what was happening to the organization when the liquor primary license was issued.”
The point seemingly missed by the village conversation is that the Legion is not, in any way, a business, nor has it ever been, nor is it progressing towards becoming one.
The Girl Guides sell cookies, but are not a business.
The Beacon Theatre sells tickets and popcorn to the public who come in and watch movies, and even rents out their space for public events, but the operators are the Lakes District Film Appreciation Society and as a not-for-profit entity do not pay commercial tax.
The thrift store is operated by the Healthcare Auxilary, transacting all kinds of purchases, but as a not-for-profit they don’t pay tax on their operation either.
The definition of not-for-profit has little to do with how money is made but much to do with what happens to that money. Having paid staff is permitted, under provincial law, and the legion has paid staff.
Board members are even permitted to be paid an honorarium, as long as it is predetermined and disclosed in their annual budget. The legion’s board does not get paid.
Under the Societies Act, a not-for-profit can even operate a social enterprise, which is a for-profit business that transfers its profits to the society, as long as it follows certain rules. Many not-for-profit organizations do this.
What defines the line is, does anyone stand to personally gain from the profitablility of the enterprise? Staff gets paid the same wage whether there is a deficit or surplus, but if there is someone who reaps greater benefit for greater profitability, that makes it a business. No one on the Legion’s volunteer board has any personal financial stake in the operation.
Councillor Charlie Rensby spoke passionately, at the February vote, about the importance of the local legion. When he was made aware of the two-year lag in tax relief, he was insensed.
“I am personally disappointed that we cannot change the bylaw to help the legion until 2025, and I will be looking for other ways to assist the legion going forward,” he said. “The Royal Canadian Legion is a sacred organization and is part of the fabric that makes our country.”
Since council has already agreed that the legion is, in fact, not a business and has agreed that no taxes should be collected, there is nothing stopping council from simply returning the money in the form of an equal grant, this year and next.
“It will have to go back to council to make this decision,” said Wiebe.
Until that happens, cuts will have to be made to legion expenses or new income generated to offset the two years of having to pay tax.