Group bemoans tax inequities.

• Author: GOULIQUER, DIANNE
• Position: Small businesses - Brief Article

Claims businesses taxed unfairly high throughout North

Small businesses in Ontario are suffering under high property tax rates, and municipal governments across Northern Ontario are guilty of "ignoring the distorted property tax system."

That is the conclusion of the Canadian Federation of Independent Business (CFIB) after completing a province-wide survey of property assessments and tax rates in 25 municipalities.

The study says industrial, commercial and residential properties of equal value pay "dramatically" different tax levels.

CFIB is a federal lobby group that works on behalf of the small business community.

The study, conducted earlier this year, finds that despite having the tools to make at least modest improvements, virtually all of the municipalities surveyed in Ontario failed to narrow the business-residential gap which forces small firms to pay a disproportionate share of taxes.

"These gaps have developed over a 20-year period," Judith Andrew, CFIB's vice-president for Ontario, says.

"We're not necessarily arguing that it should be one-to-one, but the fact of the matter is that most small business owners and self employed people, on average, earn less than the average employee.

"So to make the assumption that business people are well off and are able to shoulder a much greater share of taxes is just not right.

"And to argue that (business owners) can deduct property taxes as a business expense is all well and good, assuming there's some profit to deduct from."

Andrew says small business drives today's economy, and the rate differences are "detrimental" to small business owners and entrepreneurs.

"(The rates) are very problematic in the sense that small- and medium-sized businesses are the job creators in the community, and they're shouldering an unfair property tax load that's profit insensitive."

In North Bay, for example; CFIB reports residences are taxed at 1.23 per cent of their 1996 market value, while the city's commercial property is taxed between 1.79 and 2.56 per cent of their 1996 market value.

For industrial properties in North Bay, CFIB has found that tax rates range from 2.69 per cent of market value to 4.13 per cent.

On a $200,000 property, that would mean a $2,464 municipal property tax bill for a residence, but a $5,116 bill (on average) for a commercial property, and a bill of $8,264 (on average) for an industrial property.

Once the provincially administered portion of property taxes is included -- which adds...