Thursday, December 13, 2018 - 12:15 PM

Council Statement: Clarity on Commercial Taxes

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Since the release and approval of this year’s budget for 2019, there has been public discussion and debate about the tax burden for local business operators. On behalf of members of Council, we would like to clarify some key points.

Firstly, the City does not collect ‘business tax’, per se. In 2013, occupancy and property taxes for businesses were blended into one tax that is charged to commercial property owners only. Under this scenario, the property owner receives a tax bill and may distribute a portion of this cost onto the tenant.

Included in the category of ‘commercial property owner’ is a very broad range of properties: vacant commercial land; shopping centres; large and small office buildings; owner-occupied small businesses; restaurants and fast food locations; apartment buildings; and properties that are mixed use with both residential and commercial purposes – to name just a few. They range from multi-million-dollar commercial enterprises to moderate business establishments to small operations.

Some have asked for us to provide average tax increase number for 2019. Due to the wide variety of property types and the nature of how they distribute their taxation to tenants, we think it is more valuable to provide a range of property tax bill increases.

Below is a list of how many commercial property owners will see increases of varying ranges:

  • 14 per cent of commercial properties owners will experience no increase or a reduction in taxes
  • 34 per cent will have an increase of $1000 or less a year
  • 29 per cent will see increases between $1000 and $3500 in 2019
  • 23 per cent will have an annual increase of more than $3500 

In the last fifteen years, the City has maintained an approximate 3 to1 tax ratio, with commercial property owners contributing just over three-times the tax as residential property owners. This is no doubt a heavy burden, but it is not in fact unusual, especially in comparison with other municipalities in this province or with other capital cities in Atlantic Canada.

We have maintained the commercial vacancy allowance, which was put in place in 2013 when the taxes were first blended to give commercial property owners relief from taxes when they experience vacancies in their properties.

We have committed to look closely at how we support the business community through such initiatives as reducing or eliminating development fees and ongoing meetings with business groups through our City Business Roundtable, with whom we hope to meet in the coming week.

Mayor Danny Breen and Councillor Dave Lane