Manitoba businesses continue paying more than their fair share of municipal taxes because the province’s largest municipalities levy an unfair property tax burden on businesses like your’s. CFIB has examined recent trends between commercial and residential property tax rates, also known as the “tax gap.” This gap is a measure of property tax fairness for small business.
In 2017, the average tax gap in Winnipeg was 2.87 when considering municipal and school property taxes. This means that business owners pay over 2.8 times what residents pay on the same valued property. In Brandon, this gap was 2.38 in 2017.
Winnipeg Business Tax: time to go!
To make a bad situation worse, Winnipeg’s tax gap doesn’t include Business Improvement Zones (BIZ) fees or the new impact (development) fees. Clearly, help is needed.
Winnipeg is the last major municipality in Canada to levy an additional tax on businesses. In 2018, the Winnipeg Business Tax is projected to collect $56.9 million in additional tax revenues from businesses, without offering those businesses any additional services!
CFIB has lobbied extensively on this issue and while some success has been achieved, progress has been at a snail’s pace. In 2009, Winnipeg Business Tax was 7.75% on rental value, and began a tax credit (threshold) on rental values at $14,040. While rate has decreased to 5.14% in 2018, and the threshold has increased to $33,000, the Winnipeg Business Tax still impacts over half of all businesses in the City.
It is time for a clear plan to get rid of this tax once and for all!
Practical solutions for fair taxation
To ease the municipal property tax burden on your business, municipal governments should:
- Narrow the property tax gap between businesses and residents;
- Provide earlier property tax notices for commercial taxpayers;
- Close the gap without raising the business tax rate; and
- Move away from utilizing a flat tax rate for residential properties.
To eliminate the Winnipeg Business Tax, CFIB doesn’t want to see:
- Reducing the business tax by increasing residential property tax;
- Merging the business tax with other forms of property taxes; and
- Introducing new taxes to finance the elimination of the business tax.
Do you have stories to share about how increasing municipal and school property taxes have negatively impacted your business? Call CFIB today at 1-888-234-2232, 204-982-0817 or send an email to [email protected].