Shachi Kurl |
Nanaimo Businesses Pay 2.78 Times Residential Tax Rate
How would you feel if you were paying two, three, four, even
five times as much property tax as your next-door neighbour, and yet not getting
the same amount of services? That’s the reality facing small business owners in
British Columbia every day. This week, the Canadian Federation of Independent
Business released its 2012 Municipal Property Tax Gap Report, finding that BC
small businesses pay an average 2.78 times the residential tax rate for
properties of equal value.
Small business has a big impact on BC’s economy, accounting
for 98 per cent of all BC business, providing well over half of all private
sector job creation and generating just under a third of our GDP. Between 2009
and 2010 alone, small business created close to 14,000 net new jobs, or around
36 per cent of all jobs created. Ensuring conditions that encourage small
business success is vital.
This year’s report shows progress toward achieving property
tax fairness has essentially flat-lined. On the one hand, this is good news –
the trend of increasing the unfair tax burden on small businesses is
unsustainable. On the other hand, the failure to achieve any meaningful
reduction in the gap is irresponsible and harmful. This lack of political
willpower continues to cost not just small business owners, their families and
employees, but also the economic health of our province. A recent CFIB survey
found that 69 per cent of our members ranked their municipal property tax as the
tax most harmful to their business, and this had grown from only 38 per cent six
years ago.
Municipal governments rely on property taxes for funding, and
so increased spending requires higher property taxes. Business always pays a
higher rate than residents, making them especially vulnerable to the impact of
excess spending. Property taxes must be paid regardless of whether a business
makes a penny in profit. Their property tax bill can be the difference between a
business thriving, surviving or dying. In any case, it is not money being used
for job creation, expansion or innovation.
In Nanaimo, CFIB found the municipal tax gap rose over the
last year to 2.76 from 2.68, and is on par with the provincial average. This gap
of more than two and a half to one represents a real burden on local businesses,
and on the regional economy. This matters for your families and communities.
That’s why it’s important, and that’s why all of us should care.
And that’s why CFIB will continue to speak out for a
sustained commitment to greater tax fairness. This will require more action,
more progress in narrowing the property tax gap, and a greater effort to reduce
municipal operating spending.
Small business owners are the lifeblood of the BC economy.
They deserve to be treated fairly. Healthy communities depend on
it.
Shachi Kurl
Director of Provincial Affairs, BC & Yukon
Canadian Federation of Independent
Business
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