Wednesday, September 19, 2007
Page: B1 / FRONT
Section: Westcoast News
Section: Editorial
Byline: Doug Ward
High taxes not harming business climate, panel says; But group reviewing rates urges city to gradually reduce business tax load
VANCOUVER - A property tax review commission told Vancouver city council Tuesday that high business taxes are not having a negative impact on the city's investment climate.
Nevertheless, the commission is urging council to gradually reduce the share of the property tax load carried by business.
The commission, chaired by Stanley Hamilton of UBC's Sauder School of Business, said the business share of the general tax levy should be pared down to 48 per cent from the current 50.4.
The issue is a thorny one for civic politicians because lower business taxes would mean bigger property tax bills for residents.
Council voted to submit the commission's report to a public consultation process so homeowners can have input.
Hamilton told council business tax rates don't play a role in determining whether a business locates in Vancouver rather than in other large Canadian cities such as Toronto or Calgary.
But Vancouver's rates are dangerously higher than those in the rest of Metro Vancouver, he added.
This imbalance has so far not caused businesses to set up elsewhere in the Lower Mainland rather than in Vancouver, said Hamilton, but the gap could reduce the city's competitiveness in the future.
"You don't go to Toronto because of taxes but you might go to Richmond."
Hamilton told council a 48-per-cent share for business would ensure Vancouver's competitiveness with the rest of Metro Vancouver.
"We didn't want to see you wait 'til you see visible signs that you have a problem."
The Vancouver Fair Tax Coalition, which has lobbied for lower business taxes, said the commission didn't go far enough.
Coalition co-chair Bob Laurie said "it's a great first step because it recognizes the imbalance and the inequity.
"But we believe it should be far lower -- about 45 to 46 per cent (of the total tax load). But we also don't want to create a problem between residents and businesses."
The coalition has estimated residential properties pay 0.57 cents for every $1 of city services they consume.
Businesses, in contrast, pay $2.07 for every $1 of services consumed.
Hamilton disputed that argument, arguing business receives many indirect benefits from services provided by the city.
"Imagine a city with no parks, with no services for the residential sector, it's unlikely to be a city that would attract people to live there. Yet, these are the very businesses that depend on having people to live there."
However, COPE Coun. David Cadman said Vancouver is currently a city with no services because of the protracted strike by city employees.
Cadman's comments drew applause from strikers who had removed their picket lines for the first city council session of the fall and packed the gallery.
The union members did not disrupt the meeting and left quietly after about an hour.
dward@png.canwest.com |
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