London businesses are getting a big win when it comes to provincial tax cuts in the 2020 Ontario budget tabled Thursday at Queen’s Park.
Local businesses stand to save a combined $21 million in tax cuts due to a reduction that the Mayor’s Economic Recovery Task Force had sought from Ontario’s Finance Minister.
The tax cut applies to the provincial business education tax, which the city said will give the vast majority of commercial and industrial properties in London a 29.6 per cent reduction in 2020 business education tax levels.
The city said the change also means a 10.5 per cent reduction in total 2020 property tax levels, including municipal and education.
“This will provide much-needed relief to hundreds of London businesses as they recover from the impacts of the COVID-19 pandemic,” said Mayor Ed Holder, who personally lobbied the Finance Minister for the change.
“Our task force has successfully lobbied in the past for financial relief for homeowners and supports for London’s most vulnerable.”
Holder said before this new announcement, there had been a “total inequity across the province with some municipalities, particularly GTA and Hamilton,” paying 30 per cent less.
He said the difference made it hard for London to entice businesses to come to the city, given the lower tax rates in other regions.
“This equalizes the playing field across the province,” he said.
Before the change, the city reported that a restaurant in London would pay 1.25 per cent in the provincial business education tax in 2020, while a restaurant in Toronto was charged 0.98 per cent.
From 2007 to 2012, Holder said the previous provincial government made some progress on moving toward a uniform business education tax rate, but those reforms were paused pending a return to a balanced budget.
“It was started by a prior government, but they never finished the job.”
He said when he brought the issue to the current government, it recognized the difference was unfair, and it made the change within a few months.
“It’s great to see the province making this provincial tax fair for London businesses,” added Deputy Mayor Jesse Helmer.
“It will provide substantial relief for business property owners, and I hope they share those savings with their tenants.”