Vancouver Sun
Thursday, February 8, 2007
Page: C1 / FRONT
By: Don Cayo
Cities across B.C. take bigger tax bite out of business
Vancouverites who are embarrassed when business groups finger the city as an unrepentant tax-gouger might be relieved to learn there are worse places to do business in B.C.
But not very many.
Coquitlam has the dismal distinction of being the only city to treat its businesses less fairly than Vancouver. And just three smaller municipalities -- North Saanich, Queen Charlotte and Lions Bay -- do worse.
Mind you, lots of other places are hustling to prove that they can be avaricious, too. Even as businesses and industries have been reduced to begging for fairer treatment on property tax, a shocking 73 per cent of cities, towns, villages and districts are blithely turning the screws tighter. And at a faster rate, too.
This dirty little secret -- how so many councils exploit the imbalance in voting power between residents and businesses -- is exposed in a new report, Uneconomic Development: The Growing Property Tax Gap in British Columbia, being released today by the Canadian Federation of Independent Business.
The report analyzes the ratio between the tax rates for businesses and residents. It's all over the map -- from a low in Gold River, where businesses pay just 1.6 times the residential rate, to a high of 5.83 times in North Saanich. Coquitlam comes in at 4.69, and Vancouver at 4.67.
These numbers -- and those in a chart accompanying this column -- actually make municipal councils look more fair than they are. They reflect the total tax bills, including things like school and hospital taxes and regional transportation levies. Since the add-ons tend to be more equitable, they lower the ratio.
If you look at just municipal tax, the numbers soar. Vancouver's business tax rate is 5.82 times what residents pay, Coquitlam's is 5.47 times, and North Saanich's a whopping 8.14 times.
It is hard to measure the value of economic activity that never takes place. But it's just as hard to believe the tax gougers aren't shooting themselves in the foot, deterring new businesses and growth of existing ones. After all, small-business owners in B.C. rate property taxes as the single most hurtful of the government-imposed costs they face.
One CFIB recommendation -- a worthy one, although I won't hold my breath waiting to see it happen -- is that municipalities voluntarily fix this imbalance.
Happily, a few places are doing just that. The leader is Belcarra, now with a middle-of-the-pack ratio of 2.72, down from 4.17 three years ago. Next is Fort St. John, down to 2.76 from 3.49. Montrose, Whistler, Kimberley, Trail, Slocan, Wells, Sechelt and Spallumcheen have also made modest, but significant, improvements.
Most, however, are going the other way. Among towns, Gibsons went farthest in the wrong direction, from a respectable 2.07 to an iffy 3.49. Among cities, Revelstoke, Victoria and Nanaimo are all bounding toward Vancouver-Coquitlam territory, leaping into the 3s from the low-to-mid 2s.
This trend, being followed by more than 100 others, adds urgency to some other CFIB recommendations. One is that the province impose a cap on how high greedy councils can go in any given year. Another is that no new taxes -- like the GVRD's cash-grab parking tax -- be imposed until something approaching equity is achieved.
There are two other recommendations that I find wrong-headed.
One is simply silly -- to expand the homeowner grant to include business properties as well as residences. This would just make a bad tax policy worse. If, like the residential grant, it applied only to properties under a specified value, it would create another group of arbitrary winners and losers. And, because the grant would have to be paid out of general revenues, it would mean non-property owners would be subsidizing even more property owners than they do now.
It would also make councils even less accountable, as would a recommendation to increase provincial grants to municipalities. Politicians who want to spend more should have to do their own dirty work and raise the money themselves. If they can't face their voters and defend a tax increase, they shouldn't get the money to spend.
But these two off-base ideas aside, the report makes a convincing case. If the councils don't act -- and I suspect most won't -- then the province should step in as it did with port taxes, and as it is being asked to do with industrial taxes, which are even farther out of whack.
dcayo@png.canwest.com
The Top Dogs
B.C.'s 15 largest cities: Total residential and business property taxes payable per $200,000 of value ranked from most equitable to least equitable in 2006:
| City |
Resident Pay |
Business Pays |
2006 Ratio |
| Prince George |
$3,052 |
$5,966 |
1.95 |
| Chilliwack |
$1,802 |
$4,878 |
2.71 |
| Kamloops |
$2,282 |
$6,202 |
2.72 |
| Kelowna |
$1,540 |
$4,454 |
2.89 |
| Abbotsford |
$1,644 |
$5,106 |
3.11 |
| Nanaimo |
$1,964 |
$6,222 |
3.17 |
| Surrey |
$1,162 |
$4,170 |
3.59 |
| Richmond |
$1,228 |
$4,524 |
3.68 |
| Victoria |
$1,416 |
$5,364 |
3.79 |
| Pt. Coquitlam |
$1,376 |
$5,318 |
3.86 |
| New Westminster |
$1,516 |
$5,866 |
3.88 |
| North Vancouver |
$1,088 |
$4,446 |
4.09 |
| Burnaby |
$1,170 |
$4,810 |
4.11 |
| Vancouver |
$1,212 |
$5,652 |
4.67 |
| Coquitlam |
$1,260 |
$5,904 |
4.69 |
|
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