Manitoba’s largest school division is losing out on millions of tax dollars each year, thanks to tax breaks it has no control over, according to the vice-chair of its board.

That’s because tax-increment financing deals that the province and city use to entice development also force divisions to lose out on much-needed revenue, according to trustee Chris Broughton.

“We estimate, conservatively, that this is in the millions of dollars that it’s costing the Winnipeg School Division and so, ultimately, those millions of dollars are being transferred on to property owners and it ends up being homeowners that are bearing the brunt of these costs,” Broughton said.

He argues the absence of new tax dollars leads the division to rely on larger school tax hikes to homeowners than it would otherwise require.

TIF agreements allow the civic and provincial governments to devote future tax dollars to the owners of a development that they believe may not otherwise be built. The practice has become common, as governments attempt to attract development downtown.

Broughton said a TIF can offer a company either an “absolute holiday” from paying school property taxes or freeze the rate they pay for schools for up to 25 years, avoiding the school tax hikes paid by the owners of neighbouring properties.

Since the WSD’s taxation area includes much of the downtown, Broughton said his division is hit hardest by such deals. The trustee said he’s asked the city and province for a detailed analysis of how many tax dollars school divisions lose annually due to the practice but has yet to receive it.

On Wednesday, for example, Winnipeg city council approved a $3.2-million TIF for a plaza at True North Square. The province is considering another $6-million TIF for the same project, a piece of the $400-million square development.

“We’re taking large organizations that have the financial capacity to pay these taxes and we’re shifting it on to homeowners that don’t necessarily have that same capacity,” Broughton said.

Broughton said he’d like school divisions to receive a seat at the negotiating table for such tax incentives, or to see school taxes excluded from the deals.

True North, however, has said the plaza is worthy of tax dollars, since it will create an amenity the public has access to 24/7. And Winnipeg Mayor Brian Bowman believes the TIF policy already benefits all levels of government, including school boards.

“It’s important to keep in mind that TIFs are used to incent development that wouldn’t otherwise occur,” Bowman said. “Not only has it enabled us to support lots of new housing in downtown, it’s also a way to ensure, in the long run, that there’s a revenue base, which will benefit schools in the long run.”

Provincial Education Minister Ian Wishart couldn’t be reached for an interview. In an emailed statement, Wishart confirmed he’s met with WSD about the issue and noted a new school funding formula is being developed.

jpursaga@postmedia.com

Twitter: @pursagawpgsun