Wednesday, March 12, 2008
Ed Des Roches and Bob Laurie
Special to the Sun
Council can correct this tax inequity
Vancouver city council will be making one of its most important property tax decisions since 1983, when it was given responsibility for distributing general municipal taxes among the different property classes.
A lot is at stake. Council's decision will determine the ability of many businesses to hire staff, invest in our communities and stay competitive. It will also define our city and begin correcting a long-standing tax inequity.
The decision facing council is whether to accept the recommendations of the property tax policy review commission, the three-person panel established by council to review the way property taxes are determined and distributed in Vancouver.
Residential properties now account for 91 per cent of the total properties in Vancouver, and their numbers are increasing rapidly. This allows for residential tax increases to be spread over a larger number of properties with a reduced impact.
The number of commercial properties, on the other hand, is stagnating in comparison, with many being lost to residential redevelopments. Yet the tax share has not been adjusted to account for this; businesses are subsidizing residents by paying $2.42 for every dollar worth of city services they consume.
Fair taxes are not a new issue. Over the past 25 years successive councils have grappled with the challenge of establishing the annual municipal budget and collecting the necessary taxes. Each year, Vancouver's annual budget has increased without due consideration of what this means for local businesses. As a result, Vancouver businesses pay property tax at more than five times the rate of residents, well above the regional average of three times the rate.
The current city council began the process of correcting the tax inequity in 2006 when it shifted one percentage point of the property tax burden from non-residential to residential properties and then held that rate in 2007.
In 2008, council has the opportunity to move to a longer-term solution. It can adopt the recommendations of the tax review commission and, by doing so, set a long-term property tax policy that will begin to correct the tax inequity between business and residents.
Vancouver, the city known as one of the best places in the world to live, should not be also carrying the unfortunate label as the most over-taxed business jurisdiction in Canada.
Ed Des Roches and Bob Laurie are co-chairs of the Vancouver Fair Tax Coalition. |
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