Penticton spreading out the tax burden

Penticton is being held up as an example of a community getting it right when it comes to taxing businesses.

Penticton is being held up as an example of a community getting it right when it comes to taxing businesses.

According to a recent report from the Canadian Federation of Independent Business, the provincial average for business taxes is 2.78 times the residential tax rate for properties of equal value, a figure they call the property tax gap.

In Penticton, the factor was 1.83, down from the 1.90 in the previous year. That puts Penticton at No. 13 on the list of lowest tax gaps. Osoyoos with a 1.60 gap, is the only Okanagan city to have a better ranking, sitting in the seventh position.

Penticton’s chief financial officer, Doug Leahy, said the 2012 Municipal Property Tax Gap Report is out of date, based on last year’s tax rates. The current property tax gap, he said, is 1.77.

And he expects it will drop still further as the fiscal review advisory committee continues its work.

“It’s part of their work plan to look at that multiple and other taxes, evaluate that and see what recommendations they can make to council,” Leahy said, adding that in his personal opinion, council is very aware of how the business climate affects the community.

“They realize that there has to be equity and fairness across all property owners, not just putting it on one class of properties.”

Penticton Mayor Dan Ashton said it is all part of the drive by the last two councils to make the city run as efficiently as possible.

“That allows us to change some of these things,” he said. “Taxation is on everybody’s mind these days, whether you are a business or a residential property owner.”

While previous councils had edged a heavier load of the tax burden on to businesses, Ashton said that change is being reversed.

“What we need to do is bring it down to more traditional values,” he said.  “Penticton has been leading the way on this and in my opinion, I hope we continue to lead the way.”

“This year’s report shows progress toward achieving property tax fairness has essentially flat-lined,” said Shachi Kurl, B.C. and Yukon director of provincial affairs for the CFIB. “On the one hand, this is good news – the trend of increasing the unfair tax burden on small businesses is unsustainable. On the other hand, the failure to achieve any meaningful reduction in the gap is irresponsible and harmful.”

Other communities in the province place a much larger load on their business sector. In North Saanich, a business will find itself paying as much as 10 times the rate of a residential property owner.

Ashton likens treating businesses “fairly and equitably” to one spoke in a wheel of factors that make a community a good one for business to flourish.

“I know there will always be a difference of opinion, some people feel business should pay more these days,” he said. But, he continued, businesses are increasingly mobile and a community needs to have fair taxes, a good, educated workforce and other factors to draw in businesses.

“The more spokes that are removed because of inequity, the wheel is not as strong,” said Ashton.


Penticton Western News