Toronto’s 2012 operating budget debate may have seemed to be all about mayoral politics and melodrama -but for small businesses, it also delivered some incremental good news.
This year, as has happened every year, small businesses received a small break on their property tax rate. In 2013, it sits at 2.76 times the rate of residential properties. The rate is within reach of the goal adopted in 2006 of reducing the rate to 2.5 per cent by 2015.
Council adopted that plan as a part of its ‘Enhancing Toronto’s Business Climate’ initiative. Historically, businesses have paid far more property tax than residential properties. In 2006, commercial properties paid 3.68 times residential, industrial properties paid 4.09 times residential, and multi-residential properties paid 3.63 times the residential rates.
In 2009, council created a new property tax class of small business, and taxed it at 3.26 times the rate of residential property taxpayers.
Each year since then, the rate has been reduced. This year was complicated by the 2012 property re-assessment - meaning that small businesses will be paying a small increase of .33 per cent while residential properties will pay an increase of 2.51 per cent.
But according to Michael Thompson, chair of the city’s Economic Development Committee, the annual shift will do a great deal to make Toronto a more attractive place for business.
“Toronto’s economic climate is certainly moving in the right direction,” he said. “I would describe it as being healthy and certainly will get healthier and can get healthier. And clearly we hear from businesses all the time that the tax rate that they pay is an impediment.”
Thompson emphasized, however, that taxes aren’t the only factor that businesses should take into account when choosing to locate in Toronto.
“Taxes are one of the important ingredients but with respect to business owners there are a number of other factors,” he said. “Lower taxes are extremely important but also access to market, access to capital, which is what we’re trying to work with.”