Progress on Property Tax Fairness Stalled: CFIB releases 2012 Municipal Property Tax Rankings and Report
Vancouver, June 25, 2012 – Progress in achieving property tax fairness for BC’s small business owners has stalled, the Canadian Federation of Independent Business' (CFIB) 2012 Municipal Tax Property Report shows.
With property taxes due this week, this year’s study shows small business owners face payments that are, on average in BC, 2.78 times the rate of tax residential owners pay for the same value property. The difference in ratios is known as the property tax gap.
This represents a barely noticeable improvement over last year’s results, which had small business owners paying 2.79 times the residential rate.
“Seeing the gap effectively flat-line is worrying,” says Shachi Kurl, CFIB Director of Provincial Affairs.
“An optimist would note that this is the third year property tax ratios haven’t increased. On the other hand, the failure to achieve greater reductions across the province does nothing to relieve small business owners’ concerns of a heavy tax load.”
A recent survey found 69 per cent of CFIB’s members ranked their municipal property tax as the tax most harmful to their business. Six years ago, 38 per cent held this view.
“It’s an issue of fairness. Small business owners pay much higher property tax rates than homeowners, but they don’t consume municipal services at the same rate,” says Kurl. “Businesses recognize the importance of the essential services that are supported by property taxes. But they aren’t seeing real value for their dollar, especially when they could be investing this money in new hires, training and innovation.”
While overall the tax gap remained effectively unchanged, CFIB’s analysis did reveal some interesting developments within several regions of the province.
At 4.85, Coquitlam’s gap ranked highest within Metro Vancouver, meaning an average small business will pay $9,400 this year, versus $1,950 for the average homeowner. Meanwhile, Vancouver’s gap fell to 4.32 from 4.55 last year, charging businesses an average $10,300 compared to $2,380 for residential owners. Saanich and Richmond cracked the notorious 20 “Worst Offenders” list this year with gaps of3.78 and 3.72, respectively.
North Saanich retained the notorious distinction of topping the “Worst Offenders” ranking for the third year in a row, weighing in with a tax gap of 6.02, more than three times the CFIB recommendation of a ratio not exceeding 2:1. In total, 18 of the 20 worst offenders were repeat offenders from the previous year.
Conversely, some promising trends were uncovered by CFIB’s inclusion of the ten “Most Improved” communities, showing substantial improvements in Grand Forks, Revelstoke and Kitimat, although Revelstoke remained the worst offender in its region. Vancouver also managed to break into last place among the most improved communities, while still remaining on the list of 20 worst offenders.
CFIB is again calling on municipalities to narrow the tax gap to a ratio of 2:1, or double the rate paid by residential owners. Toronto and Saskatoon have demonstrated that such progress is achievable over time. The Federation also urges earlier notification of commercial property tax assessments, along with more flexible remittance options such as quarterly installments.
Contact Shachi Kurl for comment at email@example.com
Links to regional backgrounders:
CFIB represents 10,000 small-and medium-sized businesses in British Columbia, and has 109,000 members across Canada.