North Saskatoon Business Association blasts Clark on business tax ratio

Posted on October 7, 2016 in

North Saskatoon Business Association blasts Clark on business tax ratio

One of Saskatoon’s largest business advocacy groups is blasting mayoral candidate Charlie Clark’s opposition to a proposed policy that would reduce taxes for commercial property owners.

The North Saskatoon Business Association (NSBA) says Clark’s refusal to consider lowering the city’s tax ratio in favour of businesses “represents scarcity-based thinking that is intended to create a divide between residents and businesses.”

Clark’s opposition to the proposal is likely out of line with what the majority of people in Saskatoon think, and his description of it as an “NSBA proposal” during a news conference is inaccurate, NSBA executive director Keith Moen said in an interview.

“He basically threw us under the bus, and we’re just saying, ‘Hey listen, that’s not how it’s going down, and the theory that you’re (proposing) in terms of the residents versus businesses couldn’t be further from the truth.’ ”

Clark said in an interview that he called the news conference in response to answers mayoral candidates Kelley Moore and Don Atchison gave to an NSBA questionnaire, and that he had no intention of “throwing the (group) under the bus.”

Asked about his view on the tax ratio, Clark stood by his position that reducing it will erode the city’s ability to raise the revenue needed to maintain and improve neighbourhoods, and that larger forces govern economic growth in the city.

“I absolutely know we need to continue to grow opportunity here,” Clark said. “I just don’t want to undermine our ability to do that by loading more tax burden onto residents and making it more difficult to provide the services people need and value.”

The city’s tax ratio defines how the property tax burden is shared between commercial and residential property owners. It has been fixed at 1.75 since 2011, meaning businesses pay $1.75 in property taxes for every $1 paid by homeowners.

In 2013, council deferred until 2017 — the next reassessment year — a recommendation by the administration that it be lowered again, to 1.43, by 2020. The NSBA and other business groups are now asking for the reduction to take place over 16 years.

The NSBA believes that reducing the ratio does not constitute a “shift” but a means of creating opportunity for business investment, thereby increasing both the residential and commercial tax bases, Moen said.

In 2001, council voted to reduce the tax ratio to 1.75 from 2.41 over a 10-year period. Over the same period, multi-residential property tax rates were also lowered to equal residential property tax rates.

A report submitted to council by the administration in 2013 found there had been an $8.7 million tax burden shift to homeowners from commercial property owners — the equivalent of a 1.4 per cent annual tax increase for homeowners — over that 10-year period.

Atchison has said he would consider the proposal once the economy becomes more “robust.” Moore has said the supports lowering the ratio on the basis that lower taxes for businesses will allow them to expand, thereby broadening the city’s tax base.

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