Vancouver city council’s April 21 vote to shift 1% of the tax burden from businesses to residents still leaves an unfair disparity, according to business tax reduction advocates.
Burgess, Cawley, Sullivan and Associates principal Paul Sullivan estimates that Vancouver businesses consume only 22% to 23% of city services, but pay 47.5% of the total 2011 municipal tax bill.
“Even if you adjust that upwards because profitable businesses can write off property tax costs, the Vancouver rate is still high,” Sullivan told Business in Vancouver minutes after city council’s vote.
In 2010, Surrey businesses paid 32% of the total tax bill, whereas businesses in Abbotsford pay 37%, the District of Langley 39% and Coquitlam 42%.
The flip side is that mayor Gregor Robertson and his Vision Vancouver colleagues boast Vancouver residents pay the lowest tax rate in Metro Vancouver.
Vancouver’s 2010 tax rate for each $1,000 in assessed value was $2.15. The Metro Vancouver average was $3.02, whereas the highest residential tax rate was in Abbotsford at $4.77.
Comparable figures for 2011 are not yet available because not all municipalities have set rates yet.
In addition to the disproportionately high taxes businesses pay, Sullivan believes Vancouver residential rates are comparatively low for one other reason.
Residential construction is booming. For every $1 that developers spend in Vancouver to build commercial properties, they spend $5 to build residential homes.
That’s down from the pre-recession boom year ratio of 1:12 but it is enough to make Vancouver increasingly a bedroom community, Sullivan said.
“About 1.1 million square feet of new office construction has been built in Metro Vancouver since 2006. Only 260,000 square feet of it has been built in the booming metropolis that is the city of Vancouver,” he said.