The Vancouver Courier
Friday, September 21, 2007
Byline: Allen Garr

Business lobby taxing sense

It will require an act of faith for Vancouver city council to implement the recommendations of the city's property tax policy review commission.

The commission wants council to continue shifting the tax burden from commercial and industrial property owners to homeowners. But faith was obviously lacking among members of the opposition when they reviewed the commission's final report to council on Tuesday.

We have been regularly told about the inequitable situation in Vancouver where commercial and industrial properties are taxed at six times the rate of residential property. And, indeed, over the years there have been incremental shifts of that burden to reduce the inequity.

A one per cent shift occurred last year. This year, the NPA majority voted to freeze taxes for business and dump the whole increase on residential. As a result, in the past two years, under Mayor Sam Sullivan's rule, business has had a two per cent increase in their property tax bill while homeowners' taxes have gone up almost 15 per cent. Right now non-residential pays 52 per cent of the tax bill. Homeowners pick up 48 per cent of the tab. The commission wants those numbers reversed and soon.

There would have been no tax policy review commission if it wasn't for the effective and increasingly voluble lobbying by the Vancouver Fair Tax Coalition. Its most regular spokesman is the charming and relentlessly determined Bob Laurie who represents major commercial real estate interests in town.

In fact, the overwhelming majority of briefs and oral presentations to the commission came from business. Of the 40 written submissions, 23 came from members of one business improvement association.

Their arguments for reducing taxes on business have been made more compelling in recent times when the Coalition produces small business owners, who tell council heart wrenching tales about their precarious existence thanks to the tax burden they bear.

The impression is left that businesses are fleeing Vancouver or folding under the strain. That impression is often echoed in the media. But as the commission chair Dr. Stanley Hamilton says, the "bleak picture painted in the media" about high taxes "overstates the case."

But what is the case? That's what COPE Coun. David Cadman and Vision's Raymond Louie tried to find out from Hamilton.

Is there any evidence that businesses are leaving Vancouver because of property taxation? The answer was no. Is there any evidence that rental value or vacancy rates of commercial properties in the city have been hurt by property taxation? The answer to that was also no.

The commissioner also said it was unclear whether the pace of commercial investment and development in Vancouver has been hurt by property taxation.

As for commercial taxes in Vancouver compared with Toronto, Calgary or Winnipeg, the commission concluded that "total city-levied property taxes per square foot of occupied office space are lower in Vancouver than in Calgary or Toronto but higher than in Winnipeg."

So both Cadman and Louie wondered: where is the evidence of a need for a tax shift?
Well, Hamilton said, when you compare Vancouver to other municipalities in the region, we are on the high side. We could be in trouble if that doesn't change.

But why drop business's share of taxed to 48 per cent? There is no formula that has 48 per cent at the end of it, Hamilton admits. But it should ensure Vancouver remains competitive.

There will be public hearings on this issue before council finally decides on a tax shift in January. Laurie and his well orchestrated friends will ask for even more, of course.
And I suspect that, regardless of the opposition's skepticism, Sullivan and his NPA caucus will keep the faith.