June 27, 2012, Vancouver — Progress in achieving property tax fairness
for British Columbia's small business owners has stalled, according to
the Canadian Federation of Independent Business' (CFIB) 2012 Municipal
Tax Property Report.
With property taxes due this week, this year's study shows small
business owners in B.C. face payments that are, on average, 2.78 times
the rate of tax residential owners pay for the same value property. The
difference in ratio 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 20 “worst
offenders” list this year with gaps of 3.78 and 3.72, respectively.
North Saanich topped 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 repeats 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 urged earlier notification of commercial property
tax assessments, along with more flexible remittance options such as
quarterly installments.
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