The B.C. government is planning on providing some tax relief to small businesses, non-profits and arts and culture organizations hit hard by property tax increases.
The province announced on Friday plans to introduce the interim business property tax relief legislation this spring.
The legislation will give municipalities the ability to provide property tax relief to small businesses and organizations that they identify as paying high property taxes.
“I understand people’s frustration after years of an out-of-control real estate market have left many small businesses, non-profits and arts organizations struggling with unexpectedly large tax increases,”Municipal Affairs and Housing Minister Selina Robinson said.
“With this interim legislation, we are giving municipalities the tools they need to provide immediate property tax relief to targeted properties, for 2020, while we continue to work with stakeholders on a permanent province-wide fix.
“The old government heard concerns and did nothing — we listened and got to work on solutions for people.”
Pressure has been building on the province to act as businesses, especially in Vancouver’s busiest corridors, are forced to shut down due to rising costs.
In April, city council approved a two per cent shift of the tax burden from businesses to homeowners in an effort to reverse that trend.
Vancouver Mayor Kennedy Stewart has previously said he would be supportive of provincial measures to allow additional property tax relief for small businesses.
Stewart said Friday he welcomes the new proposal and was a part of discussions with Robinson that will end up shaping the final legislation.
“This is a very serious issue for us,” he said. “We’re losing beloved businesses and non-profits due to this antiquated tax system that we have, and this is the single most important thing we can do to bring relief.”
The province says the interim legislation would allow municipalities to exempt a portion of the value of a subset of commercial properties from taxation, easing the tax burden for tenants responsible for property taxes through their commercial leases.
The plan is to have the new, interim rules apply to the 2020 tax year.
Stewart said city council would then have to pass a new bylaw to reflect the legislation, which would include public consultation. But he’s hopeful that could also get passed quickly to bring relief as soon as possible.
“We need to get this passed by March 31 to provide relief to businesses this fiscal year,” he said. “I do want to see the details of this, but if it is what we want then I would encourage all parties in the legislature to support this and get it through quickly.
“Don’t do the regular bickering back and forth. Just get it done so we can take the stress off these legacy businesses and non-profits. That’s the key here.”
Shelly Klassen, owner of Blushing Boutique on Richards Street, has told Global News her taxes have doubled in five years. She said Friday that she would welcome any additional relief.
“Definitely very excited,” she said upon hearing about the proposed legislation. “Anything is good news.”
Klassen said she would be supportive of at least a 10 per cent tax cut, saying the rising costs coupled with a spike in property crime has taken a toll.
“The whole neighbourhood has gone to hell with crime, but property taxes have still gone up, which doesn’t make sense,” she said, adding she’s hopeful municipalities take advantage of the new legislation as soon as it’s available.
“Is it happening quick enough? I’m not sure. How many small businesses are left downtown?”
Under the current assessment system, properties are valued based on “highest and best use,” which means land with a single-storey commercial building on it may be valued as if it were being used as a multi-storey residential tower.
In October, Liberal MLA Todd Stone introduced private members legislation that would enable local governments to reduce property taxes on unused airspace above current small businesses through a new commercial property sub-class.
Stone says the interim legislation provides few details to business struggling.
“There really is not a lot of detail there. There is no sense of what actually those interim measures actually means and what the timelines would be,” Stone said.
“The clock is ticking. We have already had businesses make decisions and lay employees off.”
The Canadian Federation of Independent Business (CFIB) says nearly one-third of B.C. businesses are advising against starting a small business in their community because of high property taxes.
“The current ‘tax on air’ is making it more difficult than ever for B.C. businesses to make ends meet. Unless we make a concerted effort to help local shops and cultural spaces that play vital roles in their communities, they will continue to be forced to close their doors,” said CFIB Western Economist Aaron Aerts.
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