Saskatoon and area rank highly when it comes to property tax gaps
13 Nov 2014
SCOTT LARSON THE STARPHOENIX
City and area rank highly when it comes to property tax gaps
SASKATOON — Martensville, Warman and Saskatoon are the top three cities with the lowest tax gap between what business owners pay in property taxes as opposed to residential property owners.
The Canadian Federation of Independent Business (CFIB) released its annual comparison of property tax gaps for Saskatchewan municipalities. The 2013 results show, on average, commercial property owners paid 2.31 times the municipal property taxes of residential property owners.
“We are concerned business owners are paying more than their fair share and continue to get the short end of the property tax stick,” said Marilyn Braun-Pollon, CFIB’s vicepresident, Prairie and Agribusiness.
CFIB’s report examines municipal and total property tax g aps for 69 municipali-ties with a population of 1,000 or more. The gap measures the ratio of commercial and residential property tax bills for properties assessed at $200,000.
In Saskatchewan’s 15 cities, commercial property owners paid $1.48 to $4.23 for every dollar in municipal property taxes paid by homeowners, with the average being $2.48.
Martensville boasted the lowest municipal property tax gap of $1.48, followed by Warman at $1.91 and Saskatoon at $2.04.
Saskatoon had the lowest commercial municipal property tax bill of $1,598 per $200,000 of assessed value of all the cities.
Regina ranked sixth with a municipal property tax gap of $2.24 and a total commercial property tax bill of $3,899 per $200,000.
The highest municipal property tax gap went to Prince Albert at $4.23. Prince Albert also had the highest commercial property tax bill of $6,583 per $200,000 of assessed value.
CFIB has made a number of recommendations, including having municipalities reduce the size of their civil service and considering the introduction of a base tax for all homeowners.
“It’s time to dispel the myth that cities have a revenue problem,” Braun-Pollon said. “What they really have is a spending problem, and a good chunk of that is labour costs.”
She said the province has reduced through attrition its workforce by about 1,900 positions and municipalities could do the same.
“It is not a popular position, but if you look at what is driving the spending growth at city hall, the lion’s share of municipality spending goes to employee compensation,” she said.
Greater Saskatoon Chamber of Commerce executive director Kent Smith-Windsor said while he is pleased with Saskatoon’s ranking, there is concern that nearby cities have a better tax gap.
“We’re cognizant of the difference in municipal property tax between ourselves and Martensville,” Smith-Windsor said, adding businesses that have an option between the two centres will take the tax advantage into consideration.
But he said the larger problem, and in Saskatoon in particular, is the provincial side of the equation where education property tax levels are too high for both residents and business, and it has an impact on investment patterns.
The chamber would rather see faster assessment cycles (right now it is a four-year assessment cycle) along with streamlining the tax system to make it more transparent.
“People lose confidence in an assessment system when they don’t understand it,” Smith-Windsor said.
Braun-Pollon said they are not advocating for zero spending increases for municipalities, but any increase must be sustainable.
“If spending is beyond the population and inflation every year, it is not sustainable,” she said. “We understand there is infrastructure investments and infrastructure challenges, but we need to make sure our spending is sustainable. A lot of cities are going well above that.”
Braun-Pollon said cities are receiving 155 per cent more in municipal revenue sharing than in 2007.
“We worry many municipalities may hike property taxes in 2015 to fund unsustainable spending, which will further erode education property tax savings delivered in recent years.”