Vancouver companies ask to transfer a greater tax burden to residences

Article content

Business advocates are urging Vancouver city council to give a break to local small businesses struggling with rising property taxes.

This debate over what city staff call the “tax shift” has arisen periodically over the years in Vancouver and raises a complicated issue. Almost everyone says they value the shops, restaurants and businesses in their neighborhood, and no one wants to see them close anymore. But any reduction in property taxes for commercial properties would have to be offset by other taxpayers, which would mean raising taxes even more for homeowners.

Article content

Article content

“I realize it’s a balancing act,” says Patricia Barnes, executive director of the East Village Business Improvement Association. “But our job is to make sure city council understands that our business communities are hurting right now.”

Each year, after the City Council sets its operating budget, the council must determine what is known as the tax share, meaning how much different types of properties pay. By 2024, city staff recommend that 57.1 per cent of Vancouver’s property tax bill come from its residential properties and 42.9 per cent from non-residential properties.

This is the same tax rate as last year, and the recommendation comes as a disappointment to commercial property owners and their commercial tenants, who typically have to foot property tax bills.

The final decision will be up to the council later this week. Barnes understands that residential property owners probably don’t want a tax increase either, she said, “but we’re in a really crucial situation with our small businesses.”

Barnes and other local business representatives have signed up to speak at City Hall on Wednesday, when the council considers the 2024 property tax allocation.

Article content

Article content

But city staff is recommending against a tax change, as were outside experts from Ernst and Young who were recently brought in to review the city’s tax policy and found “no compelling evidence to justify a tax change” this year.

Paul Sullivan, a director at Vancouver-based international tax services firm Ryan, said: “This is something the council can do right now to show its support for businesses, because that’s what ABC was chosen to do.”

Vancouver voters supported ABC expecting “business-friendly advice,” he said, “and I think businesses feel stuck with the tax increases we’ve seen since we voted in ABC.”

Sullivan sent an email to Vancouver council and municipal staff over the weekend, citing a 2023 city report that found most Vancouver business districts had an “unhealthy” storefront vacancy rate of over of 10 percent.

City figures show the municipal portion of the property tax on an average residential property in Vancouver grew by $1,140, ​​or 62 per cent, over the past 10 years. For the average business, it increased by $10,827, or 55 percent (from $19,597 to $30,424), over that same period.

Article content

In 2019, Vancouver’s previous council voted to shift $15.8 million in taxes over three years to residential properties. That move was supported by Green Party councillors, as well as three Non-Partisan Association councilors who now represent the majority ABC party on the current council: Rebecca Bligh, Lisa Dominato and Sarah Kirby-Yung. The Council’s 2019 decision was against the recommendation of city staff. At the time, Bligh said the decision was intended “for every business to get a very clear message from this government that we value them, and as they try to figure out how to make it work day to day, we are in their corner.”

Jairo Yunis, Canadian Federation of Independent Business director for BC and Western economic policy, also advocates for tax change. His organization regularly hears from businesses forced to make “difficult decisions” about how to deal with rising taxes, he said, including raising prices for goods and services or relocating to another municipality.

[email protected]

twitter.com/fumano

Article content

Bookmark our website and support our journalism: Don’t miss the news you need to know – add VancouverSun.com and LaProvincia.com to your favorites and subscribe to our newsletters here.

You can also support our journalism by becoming a digital subscriber: for just $14 a month, you can get unlimited access to The Vancouver Sun, The Province, National Post and 13 other Canadian news sites. Support us by subscribing today: The Vancouver Sun | The province.

Article content