Business advocates renew pledge for lower commercial property taxes

Posted on September 29, 2016 in

Business advocates renew pledge for lower commercial property taxes

Saskatoon business leaders are pledging to renew their failed 2013 bid to slash business taxes and shift some of the financial burden away from commercial property owners following next month’s civic election.

The business tax ratio — which defines how much property tax business owners pay compared to residential homeowners — is 1.75, a figure the North Saskatoon Business Association (NSBA) wants reduced to 1.43 during the next 16 years.

“It creates more employment opportunities and then that, in turn, creates a bigger tax base for the city overall,” said NSBA executive director Keith Moen. “By virtue of that policy, the city will actually have more taxpayers.”

In 2001, council voted to reduce the business tax ratio to 1.75 from 2.39 over 10 years, meaning that by 2011, companies would pay $1.75 in property taxes for every $1 spent by residential landowners.

In 2013, city administrators recommended lowering the rate again, to 1.43 by 2020.

Greater Saskatoon Chamber of Commerce executive director Kent Smith-Windsor said at the time that his organization’s support for the change was not intended to create friction between businesses and homeowners.

“It’s not an ‘us versus them’ mentality. They need jobs and we need employees,” he said.

City council did not agree and, at a meeting in October 2013, voted to defer the matter until 2017 — the next reassessment year, which would provide a clearer picture of property values in the city.

On Thursday, Smith-Windsor reiterated his view that lowering the tax will not pit commercial landowners against residential landowners, but rather benefit the city by attracting new businesses and allowing established firms to reinvest profits.

“In the case of economic development through all cycles — be it a strong economic period or a slow period — sound future growth prospects are defined by the ability of existing businesses to grow and expand,” he said.

“It will reduce pressure on residential property tax simply because a bigger non-residential tax base makes taxes more affordable for everyone,” he added.

Moen said while there are challenges inherent to tinkering with tax ratios, the 16-year time frame the NSBA and the chamber of commerce are proposing should make for a smooth transition.

In a questionnaire issued by the NSBA, mayoral candidates Don Atchison and Kelley Moore said they were in favour of reducing the ratio while Charlie Clark said he was not. Devon Hein, who is also running for mayor, did not respond to the survey.

The chamber of commerce and other advocacy groups will work with whoever is elected on Oct. 26, and achieving its aims requires support from a majority of city councillors, Smith-Windsor said.

Moen said NSBA members have a range of views on the mayoral race, but the organization would prefer a pro-business mayor and council because “business drives the bus” in Saskatoon.

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