A group of city councillors are pushing for the introduction of a new property tax subclass to support struggling small businesses but they say that they can’t do it without the province’s help.
The Ford government announced in November that it would permit municipalities to reduce the cost of property taxes for small businesses but it has not yet released technical regulations that will lay out the parameters for the program and with Toronto council scheduled to approve their budget later this month, time is now running out for the city to provide the relief to businesses in 2021.
On Monday morning, a number of city councillors and business leaders held a press conference to call on the province to immediately release the regulations so that staff can get to work on implementing the new tax subclass as part of this year’s budget.
The press conference was held in advance of a council meeting scheduled for Tuesday, where a motion calling for the introduction of a new small business tax rate that is 25 per cent less than the current commercial rate will be considered.
“We all celebrated the provincial budget announcement that proposed new authority for municipalities to adopt a special tax and reduce tax rates for small business properties. However, as of today and with budget approval upon us the regulations have not yet been released to allow for the adoption if this subclass and to have staff determine its financial impacts and create the program and the bylaw that we need to get this program going,” Deputy Mayor Ana Bailão said during the press conference.
Bailão said that she had been in touch with former finance minister Rod Phillips regarding the imminent need for the regulations but believes that his abrupt resignation following a controversial decision to travel south over the holidays may have led to a delay in their release.
She said that small businesses were already struggling prior to the COVID-19 pandemic due to rising tax bills that were the product of a provincial system that assesses real estate value based on its potential worth, rather than the revenue that it actually generates.
But she said that the COVID-19 pandemic has made that situation worse by forcing a wide swath of businesses to close with limited means to generate revenue to cover property tax bills that sometimes treat their businesses as if they are high-rise condominium towers.
“This was an issue previously but COVID-19 has exacerbated the affordability issue,” she said. “I speak every day with small business owners and the stress the hardship is real and growing for all of them with each day that passes.”
The Ford government has previously indicated that it will be up to municipalities to determine which businesses are eligible for the small business property tax subclass.
In an interview with CP24 on Monday morning, a representative with the Canadian Federation of Independent Businesses said that the program could be a key factor in driving a “speedy recovery” as the pandemic begins to wane. But he said that the provincial government needs to release the regulations “as soon as possible” so that municipalities can make sure it is place for the 2021 tax year.
“I know that the province has programs to help cover property taxes but I would stress that is only for shut down businesses and there are a lot of businesses from dry cleaners to dentists that are open right now with no relief from those programs,” Ryan Mallough, the CFIB’s director of provincial affairs for Ontario, said. “So speed is key. Let’s get the regulations out so the city can work on its side and get this implemented as soon as possible.”