After a report in December outlined how Prince Albert is home to the greatest disparity between residential and commercial tax rates, the Canadian Federation of Independent Business (CFIB) is urging haste on the city to address the issue.
On average, across the province, commercial owners pay 2.21 times what residential owners pay in tax. Locally, business owners are on the hook for 3.86 times the tab of residents, before education taxes are factored in, according to a report from the CFIB.
Understanding tax reform does not occur overnight, Jennifer Henshaw, an analysis with CFIB for the Prairie region, pitched the city on a three to five-year plan to gradually lower commercial tax rates for small businesses.
“It is unfair to overburden entrepreneurs with disproportionally high property taxes,” she told council members. “They are trying to create jobs with one hand tied behind their back.”
The CFIB has over 200 members in the city and represents over 110,000 small business owners across the country, everything from hair stylists to plumbers and gas stations. She said a number of them continue to struggle and have serious cost concerns, more so with recent federal tax changes, expanded PST charges, trepidation over NAFTA renegotiations, the soon-to-come carbon tax and expanded CPP hikes slated to start in 2019.
She did commend the city for finding cost efficiencies in its 2018 budget to garner the ability to hold property tax hikes to 1.5 per cent, in stark contrast to other cities like Swift Current at 13.5 per cent. However, she said there is still "plenty of room for improvement to fix the city’s property tax gap.”
She made note of Meadow Lake and Saskatoon, both of which have introduced long-term plans to reduce the gap. In 2000, she said, Saskatoon implemented a 10-year plan to reduce the property tax gap to 1.75 in 2010, which they achieved, and hinted the city should follow suit.
There is always a fear, she said, tax cuts will jeopardize much needed financial resources for municipal coffers and could leave residents picking up the tab. She said in order to curb this reality, the city needs to grow the economy and widen its tax base.
“A competitive tax rate will encourage businesses to expand and create jobs,” she said, combating the need to stick residents with an increased bill. "When taxes are reduced, government revenue actually increases due to increased investment.”
Henshaw stressed how she was advocating to relieve pressure on mom-and-pop businesses and not big box stores in the city.
Mayor Greg Dionne has repeatedly stated he plans to tackle the issue head-on in the very near future.
"When I got in, I decided I was going to attack residential, [as] that effects the majority of residents. Over the last three years, in my first term, we have been very successful," he previously told paNOW. "I have told council that is enough, and we are going to focus on commercial [tax rates].”
Ward 4 Coun. Don Cody said the fault of growing the economy and addressing taxation matters does not only fall on the back of municipal offices. He took aim at the provincial government's expansion of PST on construction projects and said this was a major stifle to economic growth.
“We are doing everything we can,” he said. "But it is pretty hard to grow [the economy] when we get those kinds of taxes.”
Cody said the city needed to tread carefully when addressing the issue to make sure it does not deviate from its responsibility to keep residential taxes low.
On Twitter: @JournoMarr
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