Vancouver Shifts Business taxes To Homeowners

Friday, April 25th, 2003

Frances Bula

Saying they wanted to send a positive message to the business community, Vancouver‘s left-leaning city councillors narrowly voted Thursday in favour of shifting a small portion of business taxes to city homeowners.

The tax shift, which will move $2 million of taxes from the city’s business properties to its residential ones, will mean this year’s residential taxes will increase by about one per cent, on top of the 4.67-per-cent general increase council approved earlier this month.

The vote split COPE, with councillors Tim Louis, Ellen Woodsworth, David Cadman and Anne Roberts voting against the shift, while Mayor Larry Campbell and councillors Jim Green, Tim Stevenson, Ray Louie and Fred Bass supported it. Opposition NPA councillors Peter Ladner and Sam Sullivan also supported it. Sullivan and Stevenson indicated they would have supported an even bigger shift.

“I would have preferred [a shift twice as high],” said Stevenson. “Small business is the heart of our economy. What’s crippling them is taxation.”

Bass said the increase will amount to $14 for the average taxpayer.

The opponents didn’t say they were against the shift in principle. Instead, they argued the city has no policy or information about what an ideal tax balance would be, and that home-owners have not had a chance to have their say.

“This is an ad hoc thing,” said Roberts. “I know the business community has been lobbying, but the average resident doesn’t en know we’re considering this.”

Louis said he couldn’t support it because he didn’t have enough information about the impact on taxpayers.

Vancouver began a process of reassessing taxes in the early 1990s after a huge increase in commercial property values in some areas prompted massive protests among business groups, particularly small-business owners.

The council of the day established a property-tax panel and commissioned a study from KPMG on what percentage of city services were used by residents and businesses. The study showed residents used about 71 per cent of the services while their taxes covered only about 40 per cent of the tax bill. Commercial properties paid 55 per cent of the tax bill and used only 29 per cent of the services. (The remainder of the tax bill was covered by other property classes, such as utilities.)

As a result, the formerly dominant NPA councils shifted taxes, one per cent at a time, from the business properties to residential in five of the last nine years, for a total of $16 million shifted over-all until now.

Board of Trade representative Brock Ryan told councillors that besides the inequities identified in the KPMG report, the value of residential property in the city has mushroomed.

Last year, he said, the residential tax base grew by 18 per cent, while the business tax base grew by only two per cent.

He asked councillors to at least agree to shift taxes by 0.5 per cent if they couldn’t agree to the full one per cent that was the pattern under the NPA.

As well, it was noted that businesses in Vancouver pay taxes at a rate that is five times the residential tax rate, the third-highest ratio in the province.

However, while councillors were anxious to send a pro-business message on the tax issue, they were more ambivalent on a more localized, but highly emotional situation that has developed with the parking garage operated under the new Bentall V tower on Burrard.

Bentall managers say they have have complained for years that the city’s parking corporation, EasyPark, which runs the garage, has performed far below standard. The situation became so bad that city managers agreed to put out a tender for a new contract and recommended a private company, Advanced Parking Systems, be awarded the job. City engineer Dave Rudberg said he believed the business relationship between Bentall and EasyPark was “broken” with no possibility for repair.

Bentall senior vice-president Alan Whitchelo attended the council meeting and he and his staff presented evidence about a higher level of car break-ins at that lot compared with the lot under other Bentall towers, along with problems of people being trapped in elevators and generally poor service.

However, councillors voted against the recommendation, agreeing to allow EasyPark to continue running the parkade for three more months.

Louie said if EasyPark, which is a subsidiary wholly owned by the city, lost the contract, that would mean a loss of money to city taxpayers.

Opposition councillors said they were concerned because it looked as though the COPE council was making a decision on a partisan basis — the move would preserve jobs for members of the union that donated heavily to COPE in the election — and would send a poor signal to business about where its values were.

© Copyright  2003 Vancouver Sun

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