A new study suggests business owners in several urban cities are taking the brunt of taxes
Canada’s need to be more tax-competitive has long been argued by stakeholders such as public policy think tanks, small-business advocacy groups, and accounting professionals. A lot of the debate has focused on changes to the way Canadian corporations are taxed, but a new report from Altus Group suggests that business owners face another heavy burden.
“Municipalities should recognize that bringing down the commercial property tax rate is important to help make their cities more appealing to businesses, which helps create job growth and leads to sustainable revenue for the city,” said Terry Bishop, president of Property Tax Canada at Altus Group.
In its 2018 Canadian Property Tax Rate Benchmark Report, Altus Group looked at the ratio of tax rates between commercial and residential properties in 11 cities:
|
City |
Commercial/Residential Tax Rate Ratio (2018) |
% change over 2017 |
|
Vancouver |
4.398 |
-9.721 |
|
Toronto |
3.783 |
-0.694 |
|
Montreal |
3.782 |
-0.319 |
|
Quebec City |
3.568 |
7.380 |
|
Calgary |
3.056 |
11.950 |
|
Halifax |
2.798 |
1.040 |
|
Ottawa |
2.595 |
-2.840 |
|
Edmonton |
2.443 |
0.119 |
|
Winnipeg |
1.985 |
-1.036 |
|
Regina |
1.744 |
-0.123 |
|
Saskatoon |
1.722 |
0.220 |
|
Average |
2.898 |
0.601 |
In eight of the locations surveyed, the firm found that commercial tax rates were at least double those of residential tax rates, meaning commercial properties would incur at least twice as much property tax as an equally valued residential property.
“For the eleventh consecutive year, Vancouver, Toronto and Montreal posted the highest commercial-to-residential ratios in the country,” Altus Group said. This year, Vancouver is the runaway leader with a ratio of 4.398; Toronto and Montreal are practically neck-and-neck with ratios of 3.783 and 3.782, respectively.
Encouragingly for Vancouver business owners, the city’s commercial-to-residential property tax ratio has also posted the most massive decline, dropping by -9.721% from its 2017 level of 4.871. Other cities where the commercial-to-residential gap decreased were Ottawa (-2.84% change), Winnipeg (-1.036%), and Toronto (-0.694%).
Some cities surveyed by Altus group saw larger commercial-to-residential ratios compared to last year. Calgary saw the steepest rise from 2.73 in 2017 to 3.056 this year; the 11.95% increase has put the city above the average ratio of all cities surveyed for the first time in the report’s 15-year history. Quebec’ City’s ratio also grew by 7.38% compared to last year’s observed ratio of 3.323, extending an upward trajectory that it’s been on since the survey started.
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