Saskatoon boasts best business tax environment: report

Posted on December 13, 2016 in

Saskatoon boasts best business tax environment: report

Saskatoon has the most competitive business tax environment among the largest cities in every province, and recently pulled further ahead of second-place Calgary, according to a new study from the C.D. Howe Institute.

The study, published Tuesday, found that Saskatoon has the lowest marginal effective tax rate, which measures the percentage increase in rate of return needed to cover the cost of taxes, of the 10 cities considered.

“Heavy business tax burdens reduce potential returns, driving investment away to other jurisdictions,” study co-author Adam Found said in a statement, which noted that property taxes make up about two-thirds of the total tax burden facing businesses.

North Saskatoon Business Association executive director Keith Moen said that while Saskatoon’s low business tax burden is a “feather in our cap,” it is offset by competitive advantages — such as employee base and access to markets — enjoyed by other cities.

The city’s business tax ratio, which defines how much property tax commercial landowners pay compared to residential homeowners, became a contentious issue in this year’s Saskatoon municipal election.

Mayoral candidates Don Atchison and Kelley Moore advocated for further reductions as outlined by a recommendation to council in 2013, while eventual victor Charlie Clark argued that another cut would erode the city’s ability to pay for services.

The city’s low tax burden has not entirely shielded it from the effects of plummeting commodity prices, however. Natural resource companies are struggling to save money, and the effects have spread into the broader economy.

Moen said Saskatoon needs to “seriously look at” further reducing its business tax burden in the hope of generating new investment, because every other city is working to make itself the most attractive amid difficult economic conditions.

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