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Vancouver tax gap too high: CFIB

By Michael Mui, 24 Hours Vancouver



Coquitlam, Vancouver and Burnaby are the three Lower Mainland cities with the worst business “tax gap,” according to the Canadian Federation of Independent Businesses.

This means businesses in these cities are paying far more than what residents pay in property tax on the same value of property.

The information came from tax rates tracked by the CFIB since 2004 to measure changes in the residential property tax rate compared to the business tax rate in B.C. cities.

What they found was that in Coquitlam, Vancouver and Burnaby, businesses were likely to pay four times — or more — than homeowners.

Things haven’t gotten too bad since 2004, however. By 2009, the average business tax gap had risen to 2.9 times above residential property tax rates, up from 2.54 in 2004.

But that rate has since declined back down to 2.61. In particular, cities like Vancouver closed the tax gap by 22% by bringing business property taxes more in line with residential ones.

Richard Truscott, vice-president of CFIB B.C. and Alberta, said the smaller tax gap from 2009 to now wasn’t due to any co-ordinated push by municipalities to reduce the gap.

“It probably has more to do with real estate prices, and growing and shrinking assessment bases than anything,” he said.

“As the economy changes so does the assessment base for commercial versus residential. When one changes or one expands, that could lead to changes in that tax gap.”

The CFIB is advocating for a maximum two-to-one ratio for the business tax to residential gap, arguing that residential shouldn’t pay less, since businesses use fewer municipal services.

“There are lots of businesses in Vancouver paying 10 or 20 or $30,000, these are small or sometimes slightly larger than small businesses paying these tax bills,” Truscott said.

“When their taxes go up to pay for a growing city, they scratch their heads and wonder what value they get for that.”

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