Debate over commercial tax burdens needs rekindling, especially in Vancouver, where doing business in an expensive city is already a challenge.
Consider Altus Group Ltd.’s 2017 Canadian Property Tax Rate Benchmark Report. The most recent examination of property taxes in 10 major urban centres across Canada conducted by the commercial real estate industry data services provider finds commercial tax inequity alive and well on the West Coast.
Altus has compiled its analysis of the ratio between commercial and residential property taxes in Canadian cities for the past 14 years. This time around the news is not good for commercial property taxpayers in the country’s three major urban centres. According to the report, Montreal, Toronto and Vancouver have, for the 10th consecutive year, posted the country’s highest commercial-to-residential tax ratios.
The news is least good for commercial taxpayers in Vancouver, now home to the highest commercial-to-residential ratio in Canada (4.87 to 1). That’s well above the average (2.85 to 1) and almost three times Saskatoon’s (1.72 to 1). Vancouver is also heading in the wrong direction when it comes to assigning a heavier tax burden to its commercial property taxpayers: its ratio is 11.23% higher in 2017 than it was in 2016. Compare that with Regina, which cut its commercial-to-residential ratio by almost 22% to 1.75 to 1.
However, the Altus report points out that Vancouver’s commercial tax rates dropped 10.23% in 2017 compared with 2016, and for the second year running Vancouver had the lowest commercial tax rate of all the cities in the study.
That is encouraging for businesses in a region that is increasingly challenged by the high costs of living and business survival.
But the widening disparity in tax load borne by commercial property owners who traditionally use fewer municipal resources than their residential counterparts needs to be addressed.
Businesses don’t vote in municipal elections; they move to municipalities where taxes and other costs of doing business are lower.
