"Sixty-nine per cent of CFIB's small-business owners name municipal property taxes as the most business harmful tax. Business pays a much higher share of property tax than residential owners. It must be paid regardless of business profit - and many businesses must also pay privately for essential municipal services."
BC Property Tax Report, June 2013 THE latest report from the Canadian Federation of Independent Business repeats the message its B.C. chapter has tracked since 2003: at an average ratio of 2.7 to one, the gap between the property taxes levied on business-commercial classes and those paid by residential owners is still too wide.
The promising outlook is that the decline of 0.8 over 2011 numbers continues a four-year "narrowing of the gap."
So bearing in mind that businesses can claim their taxes as an expense on their income tax return, a relief not enjoyed by residential owners, it could be argued the gap is well on the way to zero.
CFIB makes a stronger case for reconsideration of the current formula when it says typical businesses do not use many of the municipal services their taxes cover. A major bone of contention, for example, is that commercial property owners "pay privately" for solid waste collection, while residential owners expect their Schaefer carts and blue boxes to be emptied as a fundamental benefit received for the taxes they pay. While that is true, many people find it hard to agree that commercial owners receive no benefit from the existence of libraries, parks, theatres etc.
Surely, the success of a given business depends in large part on the extent to which its community is thriving? Can communities thrive in the absence of those amenities? Those questions are relevant because as municipalities are quick to point out, if services are to continue at their present level, any reduction in revenue from business property taxes would have to be recovered from higher taxes on residential properties.
This was highlighted in a June 28, 2011 release to members of the Union of B.C. Municipalities by its then president, Barbara Steele. After stating that CFIB's analysis "never moves beyond the impact on business," she wrote, "The imposition of a 2:1 business/residential ratio at current levels of spending would increase the tax on the average home in BC by 14.5 per cent or $230 annually."
CFIB draws a direct link between the amount of tax revenues collected and the unfettered rate at which municipalities feel free to spend.
Mike Klassen, CFIB director of provincial affairs for British Columbia confirmed that point in his email of July 31: "We have spending rates for (the years 2003-2012) in our annual municipal spending reports," he wrote.
"The spending is usually reflected in the amount of tax collected."
Caught in the real-world of this discussion, of course, are all the ordinary folk - owners and tenants alike - who, just like commercial enterprises, have no option but to comply with the taxes assessed, regardless of ability to pay.
That explains why one of the responses to my July 24 column Lower Lonsdale losing heritage character came from Joel Posluns, president of Aiki Enterprises in the 100-block of East First Street.
Not only does Posluns own the building that houses his small not-for-profit business, he and wife Lyn are residents just one block distant. They pay property taxes at both locations, so the couple is in the unpleasant position of being able to compare firsthand the taxes applicable to commercial and residential accommodations.
After paying his 2013 tax bill of $19,912 on the business property, Posluns calculates the cumulative business-tax increase over the past five years is close to 60 per cent.
According to CFIB, the 2012 property tax gap in the City of North Vancouver is in the order of 3.84 to one which means that on a residential accommodation of similar value, the 2013 taxes would approximate $5,190 - a real-world dollar gap close to $15,000.
What brings smoke out of Posluns' ears, however, is that along with the increases Lower Lonsdale businesses endure, they have to "plead and beg for simple services like street sweeping."
Judging by the neighbourhood photographs he included in his email, Posluns' annoyance is more than justified.
There is good reason, too, for the letters Posluns has sent to city staff, to the new Auditor General for Local Government and to his MLA, former North Vancouver Chamber of Commerce president Naomi Yamamoto - all in an effort to have the area around his property cleaned up.
Analysis of the 2012 worstto-best provincial rankings of the 32 municipalities that comprise the CFIB's Vancouver Coast & Mountains division suggests all three North Shore administrations have work to do.
While the gap reported for the City of North Vancouver has dropped five per cent from 2011, its 3.84:1 ratio is still higher than the 3.61:1 recorded for the District of North Vancouver and a full 1.22 higher than West Vancouver's.
For me, the jury is still out as to whether a two to one ratio is the right goal to aim for.
While 69 per cent of businesses believe their taxes are too onerous, it's likely that percentage could be matched or topped if the same questions were asked of residents.
So when all is said and done, it's doubtful anything will improve until all participants drop their us-versus-them stance in the discussions.
On a much brighter note: I could not attend the July 30 public meeting where the Staburn Property Group unveiled its proposal for redevelopment of 101-149 Lonsdale Ave. So when a friend thought to email me a photograph of the drawings, I was blown away by what I saw. Staburn and its heritage consultant Don Luxton have not only found a way to include the shape of the original building at 101, the entire frontage of the block marries the best of the original architectural lines with those of today.
Award winning? If city staff can be satisfied as to the development's compatibility with complex building codes, I think Staburn has a winner. [email protected]
