Unique business tax arrangement in Steinbach set for council review – SteinbachOnline.com

Steinbach city council is planning to review the future of the city’s longstanding business tax levy later this year. 

Deputy Mayor Michael Zwaagstra explains the 0.5 per cent business tax has been a regular part of the city’s financial plan for many years. What makes Steinbach’s model unique is that nearly all of the revenue collected from the business tax is allocated to the Steinbach Chamber of Commerce, minus a five per cent administration fee. 

“This is a fairly unique arrangement,” says Zwaagstra. “To my knowledge, we are the only city that charges a business tax and then gives that money directly to the Chamber of Commerce.” 

Growing funds from business tax

Zwaagstra says while the tax rate itself has remained unchanged for a long time, the amount of money collected has continued to grow alongside the city’s business community. That growth has prompted council to take a closer look at whether the existing arrangement should continue as is. 

“We know the revenues continue to grow, so we have some important questions we have to look at,” Zwaagstra says. “Does it make sense to have this continue to grow each year and have that automatically go to the Chamber? Are there other areas where that money should go? And frankly, the philosophical question of whether we should have a business tax and what level it should be at.” 

Councillor Susan Penner agrees it is time for a broader discussion. 

“This is something that’s been going on at least since my time on council,” says Penner. “I would like us to discuss at study session this year: does it make sense for this amount to keep growing indefinitely, or should we be putting a cap on it? Are there other ways we should be spending a portion of the business tax? I think there’s a lot of options.” 

Penner notes that the upcoming expiration of the city’s economic development public-private partnership at the end of the year creates an opportunity to reconsider how business tax revenues are allocated. 

Business tax will be reviewed this year

Mayor Earl Funk echoed those sentiments, saying the business tax funds important business initiatives through the Chamber of Commerce, but agreed the arrangement should be reviewed. 

The Steinbach Chamber of Commerce is funded through a combination of sources, says Zwaagstra, including public funds from the business tax, membership fees, and revenue generated from various events. It also administers the Eastman Immigration Services program, which is funded by the Province of Manitoba. 

Zwaagstra emphasizes that while the Chamber receives a portion of its funding from the city, most Chambers of Commerce across Canada are privately funded and receive no public money. 

Council is expected to revisit the business tax structure later this year as part of its planning for 2026.