Commerce Tax Amendment Could Help B.C. Small Businesses

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Small business groups say they are encouraged by new state laws aimed at easing the enormous property tax burden, but fear the changes won’t arrive in time for the 2023 tax year. I have a concern.

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The bill would allow the city council to voluntarily propose tax breaks for commercial real estate if taxes suddenly rise based on potential development of space above the property.

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Jude Kusnierz, executive director of Beaumont Studios, a Vancouver-based nonprofit, faces a 300% jump in property taxes over the past five years, but is confident the tax cuts will come quickly. said no. Group out of major property tax surges in 2023.

“At the end of the day, I’m hopeful, but I’m afraid it’s too late,” said the nonprofit, which owes landlords who temporarily postponed tax increases.

Kusnierz, on behalf of Beaumont Studios and five other art groups, recently sent a “desperate letter” to the City of Vancouver calling for immediate action on the issues that have forced some nonprofits and small businesses to close. I asked for a response.

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The problem arose because the properties were evaluated based on their “best use”, which can often be new multi-story condominiums with ground floor commercial space, rather than their existing use. , because it is taxed.

That means property taxes have doubled or tripled in a few years for family-run businesses operating out of old low-rise buildings on increasingly expensive land.

As property taxes rise in large commercial buildings, tenants, not owners, bear the tax burden. However, most small businesses use a “triple net” lease that includes rent, maintenance and property taxes.

BC Finance Minister Selina Robinson said the bill is a direct response to concerns raised by small business owners and nonprofits since 2010.

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of Municipal Administration Law (Property Taxation) Amendment Law It was presented to Congress on Monday and had a second reading on Tuesday.

“We recognize[the law]is new, so we are stepping up our support to help local governments act quickly and provide relief if needed,” Robinson told the Post Media on Tuesday. “We worked closely with local authorities who said, ‘We can get this done.'”

Vancouver Mayor Kennedy Stewart said in a statement that he was pleased with the bill, which would give municipalities the flexibility to offer tax relief on a case-by-case basis.

Stewart, who urged states to make reforms, said that depending on when the law receives royal consent, it “could come into effect as early as 2023 to provide immediate relief to eligible properties. There is,” he said.

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Paul Sullivan, senior partner at Vancouver real estate consultancy Burgess Cawley Sullivan and Associates, was skeptical of the promise.

He said local governments have an Oct. 31 deadline for making decisions affecting the 2023 tax year. The Oct. 15 local elections are also a hurdle, he said.

Sullivan said, “On one of the most controversial issues we’ve been grappling with for over a decade, I’m very impressed with the ability to pass legislation so quickly, hold elections, and pass ordinances in the City of Vancouver. I’m skeptical,” he said. . “We’re already gearing up for the 2023 tax year.”

Sullivan, who has spent years consulting the government on the issue, said the business community is looking to the state for leadership.

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Instead, the state “brought the potato back to the local government,” Sullivan said. “Because they don’t want to deal with this issue.”

Robinson rejected that claim, saying that “blanketing” the same tax cut across the state wasn’t effective because “local governments know what their communities need.” .

Annie Domas, director of British Columbia for the Federation of Independent Businesses of Canada, said that while the legislation’s intentions are good, small businesses still face an enormous amount of uncertainty.

Since the tax cuts are not compulsory, Dormas said he would give discretion to local governments, which would take a financial hit from the tax cuts.

“So there’s a lot of uncertainty about whether this will be an effective tool and whether the property tax relief will be felt at the small business field level,” she said.

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BC Chamber of Commerce CEO Fiona Famlak welcomed the proposed tax reform, saying that in addition to the dramatic increase in valuations, businesses would see higher inflation, higher interest rates and higher labor costs. said it is also facing a rise in

“We are pleased that the state government is taking steps to address this issue by giving local governments the ability to provide relief to small businesses and nonprofits through new tax rate flexibility.” Famulak said in a statement.

BC Liberal leader Kevin Falcon said he would support the proposed legislation, but opposition leader Todd Stone has called for such tax amendments through private legislators bills introduced five times in the past five years. This bill was not approved by the NDP government.

kderosa@postmedia.com

— with file by Dan Humano

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