Tax break for small businesses flatly rejected by council committee

Dundas Street in London, Ont. is seen Monday, July 26, 2021. (Daryl Newcombe / CTV News)

Arguing that it constituted a tax shift rather than a tax break, city council’s Corporate Services Committee unanimously voted against creating a new property tax class for small businesses.

The province recently gave municipalities the ability to create a new Small Business Tax Class, separate from industrial, agricultural, residential and other commercial classes.

The new classification could be used to reduce the municipal rate on small business tax bills by up to 35 per cent by shifting that tax burden onto the other tax classes.

The city would also be tasked with defining what constitutes a ‘small business.’

London Mayor Ed Holder suggested the proposal wasn’t worth the time already dedicated by staff to analyze the implications and prepare a report.

“I’m just sorry that staff put any time in this,” Holder told the committee. “As much as I and we on council support small business, how ever small business is defined, to do that at the expense of other tax classes for businesses is wrong.”

Deputy Mayor Josh Morgan was equally blunt.

“There is no secret pot of money to support small businesses with,” Morgan told the committee. “All we would end up doing is shifting the tax burden from one group of taxpayers to another.

The committee recommended receiving the report and to take no action.

The report will be in front of city council on August 10.