A plea from investors of a property with $37,671 in penalties related to years of unpaid property taxes while the property was under creditor protection won no favours with Canmore’s elected officials earlier this month.
Canmore council voted unanimously to deny a request for a refund on all or part of the tax penalties assessed to Mountaineers Village since the company developing it (United Builders Group) entered into corporate restructuring under the Companies’ Creditor Arrangement Act (CCAA) in May, 2012.
In June, Hessel Kielstra appeared as a delegation to council to make the request, citing the fact that the receiver hired under the CCAA act did not pay property taxes as an oversight and the property had a much higher assessment than it should have until recently.
“As investors we are and have been very frustrated that the CCAA process has taken so long and left us in a state of limbo,” Kielstra wrote in a letter to council. “We felt that the property was assessed at about double its value and the CCAA administrators did nothing about it. This caused the taxes to be very high and then because of their slowness in dealing with this, property penalties were incurred. To add insult to injury, the penalties were assessed on taxes that were double what they should have been. This has ended up being a boon to the Town of Canmore and a further blow to the investors who already are taking a huge hit on their investment.”
Kielstra represents a group of investors into the original ownership group that were concerned the property would be lost to a tax auction as a result of non-payment of taxes. He spoke with the assessor originally and the assessment was lowered to $870,000 from $1.84 million.
He also paid all outstanding taxes and penalties in May – $73,296 and $37,671 – to stop further penalties from accumulating and prevent the municipality from selling the property at auction to recover the amount owed.
Only council has the authority to adjust tax penalties against a property and it cannot reduce the amount of taxes assessed in the past.
Manager of Finance Katherine Van Keimpema did not recommend council adjust the penalties for the property. She said from 2012-15 the Town provided numerous notices and reminders of the taxes owed and penalties assessed.
While council eventually voted to not alter the tax penalties, Councillor Rob Seeley put forward an unsuccessful motion to provide some relief to the group of investors by reducing the amount by half.
Coun. Ed Russell also expressed concern the property’s assessment was too high for several years and the assessor did not notice.
“Off the top of my head and listening to what has been presented, I am not sure we should hold them accountable for the full $37,000,” Russell said.
Coun. Sean Krausert, along with other councillors and the mayor, had sympathy for the situation the investors found themselves in, however, felt the recourse for them is in civil court, not a reduction in municipal tax penalties.
“I believe there is no doubt there were wrongs done and suffered by investors, but I do not think it was the municipality or the taxpayer that was the author of those wrongs,” Krausert said. “I think those administering the creditors arrangement were not paying attention and there should be questions asked in that regard. I don’t believe relief should come from the taxpayer.”
