Business in Vancouver
December 4-10, 2007
Issue 945
Byline: Richard Chu
We’re No. 1 – in municipal business tax load
Vancouver businesses paying highest ratio of property tax in Canada, new report says.
Vancouver has Toronto beat in this business category, but business owners might not appreciate the achievement.
At 5-1, Vancouver now has the worst commercial-to-residential property tax ratio in Canada, according to the Real Property Association of Canada’s third national property tax study.
“It makes [Vancouver] less attractive to business, because you’d get a better deal if you were a business going to Calgary or Edmonton,” said Michael Brooks, CEO of the RPAC.
Brooks noted the ratio has been rising because Vancouver has one of the lowest residential property taxes in the country, which suggests the city’s businesses have been paying much more than their share for city services. With Surrey and Richmond having the second and third lowest residential property tax levels in Canada according to the RPAC survey, Brooks said municipal leaders don’t want to make it more expensive to live in Metro Vancouver given the region’s high property values.
But Vancouver councillor Suzanne Anton said it’s not fair that Vancouver businesses have been paying up to six times more taxes than home owners.
Vancouver’s tax ratio has been rising between 2004 and 2006, while Toronto’s has been falling because that city is shifting more of the tax burden onto residential property owners. Brooks said Toronto plans to halve its ratio in the next 10 to 15 years to 2.25 compared with 4.89 in 2006.
The Vancouver Property Tax Policy Review Commission’s report released in September recommended that the city cut the tax burden on business by 1% a year for the next five years. That would reduce the property tax burden for businesses to 48% from 55%. Anton said council has already shifted 3% of the tax burden away from the city’s businesses and she would support the commission’s recommendation for further reductions.
“This is very politically challenging, because you can be sure that in the election material next year, people will be constantly reminded that residential taxes went up, but it’s not that residential taxes went up, it’s that we were helping our small businesses.”
Bob Laurie, co-chairman of the Vancouver Fair Tax Coalition, lauded the report’s recommendation, but noted more needs to be done to decrease the property tax burden in Vancouver.
“It’s definitely a move in the right direction, but a lot of work needs to be done on the basis of consumption,” he said. “The property tax system in the city of Vancouver is not sustainable.”
Laurie said the city should review all of its programs to weed out those that are ineffective. He added that Vancouver also needs to control its rising costs, which add to the tax burden of the city’s residents and businesses.
“Planning shouldn’t be done purely on the basis of what the tax implications are, but there needs to be checks and balances – tools that create the fundamental basis of fairness, equity and sustainability.”
Vancouver city council will decide on the tax commission’s recommendations sometime next spring after public consultations in February and March 2008. Vancouver city staff are scheduled to present their evaluation of the commission’s recommendations on December 11.
rchu@biv.com |
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