With municipal elections nearing, the Canadian Federation of Independent Business (CFIB) has released a report that concludes the property tax burden on Nova Scotia's small businesses is significant and unfair.
What's more, the gap between what residents and businesses pay is the largest in Halifax Regional Municipality.
"This won't come as any surprise to small business owners who've seen their tax bills grow over the years," says Leanne Hachey, CFIB's Atlantic Vice-President. "What is new is a window of opportunity to do something about it as soon as new municipal councils are in place."
The report – "Municipal Taxation and Spending: A Small Business Perspective" – examines the property tax gap between residential and commercial tax rates in municipalities across Atlantic Canada, including eight in Nova Scotia: New Glasgow, Bridgewater, Cape Breton Regional Municipality, Halifax Regional Municipality, Truro, Kentville, Yarmouth and Amherst.
It found that in 2011, commercial tax rates in Nova Scotia ranged between 2.42 times the residential rate in New Glasgow to 2.95 in Halifax. This means for every $1 in property taxes paid by a resident, a small business in HRM paid $2.95, while often receiving fewer services.
"We believe there should be a connection between what you pay and what you get. Sadly, there's a disconnect in the property tax system to the detriment of small, local, independent businesses – the very operations that make our communities unique and distinct," Hachey says.
The report also examines municipal spending to find across municipalities it increased, on average, six times the rate of inflation and population growth, fuelling the need for more revenue.
It makes several recommendations to improve the property tax system for small business owners, which include:
• Implementing a 10-year plan to reduce the property tax gap at a ratio of 2 to 1.
• Eliminating capped assessment programs.
• Holding municipal spending to inflation plus population growth.
• Introducing a business vote for municipal elections.
Throughout the municipal election campaign, CFIB will be putting the spotlight on small business and economic development issues, including property tax, municipal spending and red tape.