Ontario municipalities treat small businesses like "cash cows": property
taxes reviewed in 201 municipalities

TORONTO, June 17 /CNW/ - Small business owners continue to pay more than their fair share of property taxes according to a report released today by the Canadian Federation of Independent Business (CFIB). The Tale of Two Tax Rates: How Ontario and its Municipalities Tax Business Properties measures the disproportionately high property tax gap that currently exists between residential and commercial/industrial properties in 201 Ontario municipalities.

"While some progress has been made to right this injustice since CFIB last reviewed the gap in 2006, small businesses continue to be treated as cash cows by the property tax system," stated CFIB's director of provincial affairs, Satinder Chera. "It has become convenient for local governments to increase taxes on businesses to cover their budgetary shortfalls, resulting in an unbalanced property tax system that undermines job creation and economic growth."

With very few exceptions, municipalities have done little to recalibrate the rates for all property classes. For instance, in 2009, industrial owners in Pembroke paid over four times more in property taxes than residents (a tax gap of 4.39) on property of similar value, followed by Toronto (3.56) and Hamilton (3.33). In the commercial class, businesses in Toronto paid over three times more in taxes, followed by those in Owen Sound (2.3) and Kirkland Lake (2.21).

"At a time when governments are looking to increase other profit-insensitive taxes (Employment Insurance, Canada Pension Plan, and workers compensation), they really need to be reminded of the potentially devastating impact these taxes can have on individuals and businesses," said Chera. "Since property tax is both profit and income-insensitive, it can lead to the loss of one's home. In the case of small business owners, it can lead to the loss of their home, business and livelihood."

Both municipalities and the provincial government have a role to play in fixing the business property tax unfairness; in the case of the province it includes building on the positive steps they have taken in recent years to help fix the problem. To this end, CFIB has recommended a series of measures:

    
    -  Accelerate the Business Education Tax (BET) relief plan and expand it
       beyond 2014;

    -  Reduce the tax gap by controlling local spending;

    -  Do not allow another City of Toronto Act; giving municipalities more
       taxing powers will not solve their budget woes;

    -  Tax all property classes proportionately to the services that they
       receive.

    -  Collect all property tax data in one public repository to increase
       transparency and accountability, as they do in British Columbia.
    

"Reducing the property tax burden on small businesses does not mean that residents should pay more", explained Plamen Petkov, a senior policy analyst with CFIB. "The gross inequities in the property tax system can be fixed if municipalities control their spending at the rate of inflation and population growth, pass on the savings from provincial uploading to residents and local businesses, and thoroughly identify cost savings for service delivery."

To view the report, please visit: www.cfib.ca/on

    
    Municipalities with the highest industrial to residential tax gap, 2009
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                               Industrial to         Municipal Taxes ($) per
           Municipality       Residential Gap        $100,000 Property Value
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                                                     Residential  Industrial
    -------------------------------------------------------------------------
    Pembroke                       4.39                 1,683        7,387
    -------------------------------------------------------------------------
    Toronto                        3.56                   603        2,148
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    Hamilton                       3.33                 1,336        4,451
    -------------------------------------------------------------------------
    Calvin                         3.22                   981        3,163
    -------------------------------------------------------------------------
    Stratford                      3.13                 1,191        3,733
    -------------------------------------------------------------------------
    Brantford                      3.06                 1,304        3,992
    -------------------------------------------------------------------------
    Deep River                     2.96                 1,486        4,401
    -------------------------------------------------------------------------
    Arnprior                       2.94                 1,280        3,763
    -------------------------------------------------------------------------
    Renfrew                        2.93                 1,305        3,825
    -------------------------------------------------------------------------
    Petawawa                       2.91                   720        2,096
    -------------------------------------------------------------------------
    East Hawkesbury                2.91                 1,068        3,109
    -------------------------------------------------------------------------


    Municipalities with the highest commercial to residential tax gap, 2009
    -------------------------------------------------------------------------
                               Commercial to         Municipal Taxes ($) per
           Municipality       Residential Gap        $100,000 Property Value
    -------------------------------------------------------------------------
                                                     Residential  Commercial
    -------------------------------------------------------------------------
    Toronto                        3.28                   603        1,978
    -------------------------------------------------------------------------
    Owen Sound                     2.29                 1,283        2,933
    -------------------------------------------------------------------------
    Kirkland Lake                  2.21                 3,255        7,190
    -------------------------------------------------------------------------
    Orillia (low band)             2.21                 1,173        2,596
    -------------------------------------------------------------------------
    Brantford                      2.13                 1,304        2,776
    -------------------------------------------------------------------------
    Prescott                       2.10                 1,428        3,000
    -------------------------------------------------------------------------
    Fort Frances                   2.08                 1,612        3,356
    -------------------------------------------------------------------------
    Ingersoll                      2.07                 1,287        2,661
    -------------------------------------------------------------------------
    Pembroke                       2.05                 1,683        3,450
    -------------------------------------------------------------------------
    Stratford                      2.04                 1,191        2,426
    -------------------------------------------------------------------------
    Tillsonburg                    2.03                 1,390        2,816
    -------------------------------------------------------------------------
    

For further information: or to arrange an interview, please contact Adam Miller or Meghan Carrington at 416.222.8022 or via email [email protected]