Progress on Property Tax Fairness Stalled

CFIB releases 2012 Municipal Property Tax Rankings and Report

Vancouver, June 25, 2012– Progress in achieving property tax fairness for BC’s small business owners has stalled, the Canadian Federation of Independent Business’ (CFIB) 2012 Municipal Tax Property Report shows.

With property taxes due this week, this year’s study shows small business owners face payments that are, on average in BC, 2.78 times the rate of tax residential owners pay for the same value property. The difference in ratios is known as the property tax gap.

This represents a barely noticeable improvement over last year’s results, which had small business owners paying 2.79 times the residential rate.

“Seeing the gap effectively flat-line is worrying,” says Shachi Kurl, CFIB director of Director of Provincial Affairs.

“An optimist would note that this is the third year property tax ratios haven’t increased. On the other hand, the failure to achieve greater reductions across the province does nothing to relieve small business owners’ concerns of a heavy tax load.”

In a recent survey, 69 per cent of CFIB’s small business owners ranked their municipal property tax as the tax most harmful to the operation of their business. Six years ago, 38 per cent of our small business owners held this view.

In the Thompson –Okanagan, the municipality with the highest gap is Ashcroft – at 4.13. The community also has the seventh highest gap in British Columbia. In Ashcroft, the average small business owner pays $3,590. The average homeowner: $868.

On a more positive note, Kelowna was the best ranked amongst BC’s ten largest communities by population, with a gap of 2.37. Penticton achieved a gap of just 1.83. Across the region, 14 communities achieved a gap of 2.50 or less.

“We are encouraged to see communities in this region achieving gaps that are generally lower than other parts of the province,” says Kurl. “However, it is troubling to note that eight communities, including Kamloops, Logan Lake, Clearwater, Merritt and Princeton all have gaps higher than 3.00.”

Small business owners pay property taxes at much higher rates than homeowners, but they don’t consume municipal services at the same rate.

“It’s an issue of fairness,” says Kurl. “Businesses recognize the importance of the essential services property taxes pay for. But they aren’t seeing real value for the extra dollars they’re sending to city hall. This is money they ought to be investing in job growth, training and innovation instead.”

Once again, CFIB is calling on municipalities to commit to narrowing the property tax gap until it reaches a ratio of 2:1. Toronto and Saskatoon have demonstrated such progress can be achieved over time.

The full report and regional rankings are available at:www.cfib.ca/bc. Shachi Kurl can be reached for comment atshachi.kurl@cfib.ca.

As Canada’s largest association of small- and medium-sized businesses, CFIB is Powered by EntrepreneursTM. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.