City under fire for disproportionate business tax burden
By Kyra Hoggan
Castlegar’s the worst in the Kootenays and the fourth-worst out of 160 B.C. municipalities in terms of the tax burden placed on businesses as compared to residential taxes.
This, according to a June 15 report by the Canadian Federation of Independent Business (CFIB), which indicates only the communities of North Saanich, Revelstoke and Tumbler Ridge showed a greater gap between what businesses and residents pay in taxes for properties of the same value. The report said a Castlegar business owner would have paid 5.4 times the amount a resident would on a comparable property in 2009 – a gap that has increased since 2003, when it was 3.37. In a media release, the CFIB called on municipalities to reduce the ratio to a maximum of 2:1 (business:residential) by 2012, or they’ll lobby the province to legislate a cap on municipal business taxation. “Small businesses are unreasonably burdened with paying almost three times the property taxes of residents, on average. Our local economies and jobs are at stake if this continues,” said Bonney, adding that a cap wouldn’t have to mean residents pay more … it could, instead, mean municipalities spend less. Further adding to the inequity, according to CFIB research analyst and the report’s author, Heather Tilley, is the fact that businesses have no municipal vote. “We notice a gradual deterioration of fairness in terms of the tax rate since businesses lost the vote in 1993,” she said, explaining the average tax gap in B.C. municipalities was 1.8 in 1990, as compared to 2.94 in 2009. “We have to ask where it’s going … it’s certainly not getting any better.” Castlegar Mayor Lawrence Chernoff, however, said evaluating the tax gap is at least partly an issue of perspective. “If you look at the dollar figures, for instance in Vancouver, where it’s a five-to-one ratio, it seems like businesses there are getting a better deal – but there’s a huge difference in property values compared to here,” he said, explaining a Vancouver business will pay exponentially more in municipal taxes than will a comparable Castlegar enterprise. Chernoff also cited recent taxation issues for major industry, specifically the Celgar pulp mill, pointing out that to address those issues by reducing major industry taxation, the city cut where it could and shifted the remaining tax burden onto residents, with no increase for businesses at all. “We’re doing what we can,” he said, adding that businesses need customers, and it costs money for the city to provide the services that make Castlegar such an attractive place to live or to visit. “That’s why so much thought and energy goes into each year’s budget – we’re trying to strike that balance,” he added. “We worked on the budget this year with input from the business community. “We’re trying to work with businesses, but these changes didn’t occur overnight, and the solution will take time, too.”
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