Business fees went up for some, down for others

By Medicine Hat News on April 5, 2025.

@MedicineHatNews

Changes to city licensing fees earlier this year raised costs for about 1,500 business owners, but fees fell for 1,900 others, while the licensing department still requires the general tax base to cover its costs, a city committee heard Thursday.

The development and infrastructure committee heard that despite changes that saw general commercial licences rise from $116 to $200 on Jan. 1, the planning department expects only $100,000 in additional revenue in its $5.7-million budget, half of which is covered by general tax revenue.

That is expected to rise to 60 per cent in 2025 and 2026, said director of planning services Robert Sissons, as slower development conditions are expected.

“We have a certain amount of costs and a certain amount of revenue and the rest is tax funded,” he explained to committee member. “To fully cost-recover, our fees would more than double. Even with where they are today, they are heavily subsidized.”

Planning manager John Popoff said the level of general municipal support compared to cost-recovery and user fees is a decision that should be made by council.

Coun. Andy McGrogan said the city has to be ready when development proposals arrive, and the service adds economic activity, which benefits all residents in some way.

“We’re always going to be unique in how fast we’re growing,” he said. “And if we’re not getting a ton of activity, we still have to maintain the department.”

Coun. Alison Van Dyke said the “perception is that businesses and developers have an advantage over others in the community.”

More information should be made available, she argued.

The issue came to committee after business owners loudly complained in January that they were seeing high increases passed without much debate in the 2025-2026 city budget.

Committee chair Coun. Shila Sharps asked for an explanation and analysis of increases that rose above inflation.

General commercial licences, issued to about 1,500 city businesses each year, rose from $116 to $200 as of Jan. 1, while contractor licences rose from $206 to $400, and restaurants with liquor licences rose to either $400 or $800.

Analysis shows that those for home-based and regional business were lowered slightly to $200, and were down as well for out-of-town contractors, who now pay $900.

The department also eliminated the need for multiple licences from some companies, and eliminated e-permitting fees as the computer system has been paid off.

Managers say the city’s previous policy had been to match increases to a general rate of inflation of 2 per cent.

But the last two years have seen greater than normal inflation and higher, including seven per cent in 2024, and higher in some cases for municipal costs.

The department has also dealt with an increase in appeals, public engagement and enforcement in general where cost recovery isn’t an option. The office has also taken on work to increase housing supply and grant applications.

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