Burnaby business property taxes too high: CFIB
When it comes to the gap in property taxes between what businesses and homeowners pay, Burnaby is fourth worst in B.C., according to the Canadian Federation of Independent Businesses (CFIB).
The 2013 CFIB Municipal Property Tax Report compares the difference in property tax rates charged. Last year in Burnaby small businesses paid 4.52 times more than residential property owners, a 25.02 per cent increase from 2003 when the CFIB started producing its annual report.
The provincial average was 2.7 times, less than in 2011 when it was 2.78 times.
Worst among the province's 161 municipalities surveyed was North Saanich (5.6 times), followed by Coquitlam (4.66 times) and Revelstoke (4.59 times). Vancouver came in sixth highest (4.35), Richmond in 17th place (3.77), Surrey in 46th spot (3.0) and Abbotsford in 87th (2.53).
On the other end of the scale, three considerably smaller municipalities came in tied for 159th spot, charging the same rate for both types of taxes—Anmore, Bowen Island and Warfield.
The CFIB is advocating that the gap be capped at two to one. The report noted that in a member survey, 69 per cent ranked their local business property tax as the tax most harmful to the operation of their business.
"These taxes are also profit-insensitive; unlike income taxes, which vary according to the prosperity of a business, or consumption taxes which may be influenced by the taxpayer’s economic choices and behaviours, a property tax bill must be paid regardless of profitability."
Burnaby Coun. Dan Johnston, chair of the city's finance committee, said the study is "kind of flawed" since it doesn't factor in the different services provided through the tax rate from one municipality to another.
Some cities charge for garbage pickup on the tax bill, while others charge it as a separate utility, for example.
The municipalities themselves are all so different. "West Vancouver [ranked 82nd with a gap of 2.62 times] has got little or no industry, it's pretty much all residential," he noted.
"There's no comparable."
As for why businesses are charged more, Johnston said the city has to provide different services for them such as providing adequate transportation routes, and planning and engineering work to establish services for their employees.
For instance, shopping, restaurant and recreational services need to be established to serve those workers, many of whom don't live in Burnaby or pay residential property taxes, he said.
Johnston noted some municipalities set their rates based on the mix of sectors in their tax base. Sometimes the provincial government will cap what railways and utilities must pay which means the tax revenue requirements get spread among other sectors.
The rate goes up and down in Burnaby from year to year and the city does look at minimizing the gap to keep the city competitive, he said.
"We look at what the costs are to service that sector and the roads and infrastructure we need to supply to make those properties function."
But if Burnaby were to close that gap between business and residential, "it would result in a serious increase to residential taxpayers … It has to come from somewhere."