As businesses continue to face challenges from the pandemic, they shoulder a larger share of property taxes than the residential sector
The rates of property taxes paid by businesses compared to the residential sector is an unfair burden on the commercial sector.
That’s the view of a new report from the Altus Group and the Real Property Association of Canada (REALPAC) which looks at the property tax burdens of 11 major urban centres across the country.
While acknowledging the challenge that municipalities have of balancing budgets, the report highlights how the oversized contribution made by commercial property owners and tenants is damaging recovery.
The analysis found that, for the third consecutive year, 8 of the 11 cities surveyed have a commercial tax rate which is at least double the residential tax rate.
However, there has been some improvement as the data shows that the average commercial-to-residential tax ratio for the cities surveyed in 2020 was 2.65, a positive trend reflecting a -6.56% decrease from 2.84 in 2019.
This decrease was driven largely by significant drops in the ratios in Vancouver (-37%) and Calgary (22%).
“While the decrease in the overall average commercial-to-residential ratio is a positive step in the right direction, more action needs to be taken by governments in particular regions where the ratio has been steadily increasing,” said Terry Bishop, President of Property Tax Canada at Altus Group.
Bishop added that the impact of COVID-19 has accelerated the need to reduce the commercial-to-residential tax ratio due to the struggles that businesses are already dealing with.
And he says there is a long-term benefit for cities too.
“Municipalities should recognize that bringing down the commercial-to-residential tax ratio will not only help provide some much-needed relief to struggling businesses during this time but will also make their cities more appealing to businesses going forward. This in turn will help foster job growth and lead to sustainable revenue for the city,” he said.
Where are Canada's most taxed residential and commercial properties? https://t.co/oI5oFUfVpq
— Altus Group (@altusgroup) October 27, 2020
