Property tax time might be painful for residents of B.C. municipalities, but for companies already struggling with myriad business complications, it’s many times more painful.
This year is no exception.
Property and payroll taxes are significant costs for companies of all sizes. It’s debatable whether forcing companies to shoulder more responsibility for employee savings plans is the best way to help Canadians save for their retirement – one of the rationales that last week helped persuade Canada’s finance ministers to agree on expanding the Canada Pension Plan.
There’s little debate, however, that that expansion will raise the cost of doing business in Canada.
According to a recent Canadian Federation of Independent Business (CFIB) survey, two-thirds of business owners said mandatory CPP premium hikes would increase pressure on them to freeze or cut salaries; 35% said it would force them to cut staff.
But payroll taxes are just one in a long list of levies facing local businesses.
The CFIB’s 10th annual Property Tax Gap Report shows the municipal property tax burden borne by businesses continues to be several times higher than that of their residential counterparts.
On the bright side, effective business lobbying has helped reduce property tax gaps in most of B.C.’s major urban centres over the past five years.
But as the CFIB pointed out, Lower Mainland small businesses still face some of Canada’s highest property tax bills. Businesses, which can’t vote in municipal elections, are easy targets for outsized tax bills from city hall. Municipalities are likewise struggling to fund a wide variety of programs and projects expected of them from residents and senior levels of government.
But, especially in Metro Vancouver, where high real estate and living costs handicap companies’ ability to attract and retain talent, municipalities risk forcing them to move where overhead and taxes are lower.
That bodes ill for property taxpayers on both sides of the commercial and residential divide.
