Small Business

Long needed tax relief to SMEs on the way soon for Vancouver. Hopefully….

A recent article by Don Cayo drew attention to an upcoming council meeting where changes to taxation policy in Vancouver will be discussed and several recommendations put forward by staff. Innocuous and mundane as it may sound this will represent a significant milestone in the ten year effort to not only recalibrate a longstanding imbalance between residential and commercial (business) taxes, but to also introduce measures that can mitigate the increasingly disruptive challenge of Hot Spots created by Vancouver’s globalized real estate market. Sharon Townsend of South Granville BIA is one of the Co-Chairs of the Fair Tax Coalition, and someone who has been leading this charge on behalf of BIAs for the better half of this past decade. With her permission I’ve copied and pasted a good portion of a recent e-mail from her on the matter as I don’t think I can do a better job of summarizing why this is finally happening and why it’s such good news for small business owners in the city:

“As you may recall, the City established a Commission to review Property Tax issues that we have been discussing for years.  This was on the heels of 5 years of 1% shifts in tax burden.  We did not believe that the tax share was fair, nor did we believe mechanisms were in place to keep it fair.  In addition, we remained very concerned about the issue of Hot Spots in our neighbourhoods that were creating spikes in assessments/taxation for our small businesses without warning and without change in actual use. 

The Commission released its findings in February.  While the report did not think we needed any further correction in tax share at this time, there was a long list of recommendations that provided ways for staff to ensure that ‘fair’ was taken into consideration when setting the tax rate… there would be metrics in place that would assist staff in determining who should pay what.  This recommendation was a huge win for those of us that have been banging our heads against the wall since 2005

The Commission also came up with some powerful recommendations to help our businesses deal with our volatile real estate market.  These recommendations address the biggest threat to our neighbourhoods.  However, these recommendation are also the most complex, as they involve two authorities outside the control of the city – BC Assessment and the provincial government.

City Council handed the report to staff in February and told them to read it, figure out if the recommendations were feasible, figure out if they would help the situation and report back.  The staff report was released yesterday and will be presented to Council on July 9th.  

Staff have clearly stated that ALL recommendations are not only doable, but helpful.  THAT IS HUGE.  If Council heeds the advice of staff, we have succeeded in making things infinitely better for the commercial rate payer in Vancouver. We asked for fairness, and predictability.  We aren’t going to get lower taxes, but we are going to be able to avoid some of those outrageous spikes in taxes each year that nobody saw coming.  For those communities where they are tinkering with community plans, or rapid transit… this is HUGE. 

 So, from a long range perspective, this report is a testament to 9 years of BIAs pushing for solutions, not giving up and joining forces with other like minded organizations to get it done.”

So, let me indulge a little with my own analysis of why this isn’t just good news for business owners and investors, this is also good news for so many people who have raised concerns about small businesses being priced out of our respective communities only to be replaced with vacant storefronts, or chain stores that are out of character with areas, or higher end stores that are culturally and economically out of touch with local residents. In short, this brings much of Vancouver’s built environment closer in synch with local economies and local communities. No matter what kind of income level your community has on average this is good news, but it is particularly good news for lower-income communities. Hastings Crossing BIA for example, saw an increase in taxes of nearly 20% last year. A near 20% jump in one year after the City’s tax averaging took its toll in this “hot” area. These new measures won’t eliminate stuff like that, but they will buffer it much better. The recommended changes may also relieve pressure in other commercial corridors or districts by improving affordability and predictability there, which in some respects will reduce the competitive advantage that areas like the DTES have on price. Another way of looking at it though is that the bar for opening up a venture will be lowered and stabilized, making it more feasible for local serving retail and younger, less capitalized entrepreneurs, non-profits and social enterprises to operate.  If Council adopts the recommendations that is.  Improving financial sustainability or feasibility for local mom and pop shops and non-profit service providers is timely, as they have been increasingly squeezed by rising taxes and lease rates, even in places like the Downtown Eastside, as this Central City Foundation report from 2013 reveals.

So whether you’re a small business owner, a non-profit in an area experiencing real estate pressures, or someone who is concerned about displacement and gentrification, I encourage you to write Mayor and Council in support of the staff recommendations on commercial taxes being presented this Wednesday July 9th. I also encourage you to write Minister Coralee Oakes as the Province, and BC Assessment Authority, are both part of the solutions put forward. Read the whole report here –> staff report July 2014.

Leave a Reply

image description