Business Education Tax

In 1998, Ontario took over school boards’ authority to set property tax rates, thereby disconnecting school funding from property tax revenue. Residential rates were immediately equalized across the province and an advisory panel recommended moving quickly to equalize business education tax rates as well. It is now 19 years later and Ontario has failed to adopt this recommendation to provide tax fairness to businesses across the province.

  • Toronto commercial property worth $5 million pays $15,500 more annually in Business Education Tax than it would if it were in Halton Region – a 36% premium for no added benefit or service.
  • London, Waterloo and Windsor businesses pay some of the highest rates in Ontario and pay 61% more than Halton Region for no added benefit.
  • 98x is the commercial-to-residential tax ratio threshold the province allows its municipalities to use.
  • 3x is the commercial-to-residential Toronto BET ratio.
  • 5x is the commercial-to-residential BET ratio for London, Waterloo and Windsor.

These rate inequities were highlighted in a January 2015 report by economists from the University of Toronto and Trent University commissioned by the Toronto Association of Business Improvement Areas (TABIA). Reducing BET rates is currently on hold until Ontario balances its budget in 2018. However, the above report indicates that equalizing rates immediately would delay balancing the budget by only four weeks and would unlock capital for the creation of 18,000 jobs in Toronto and major Ontario municipalities.

OUR POSITION IN 2017 ONTARIO BUDGET SUBMISSION:

  1. That Ontario resume the business education tax reduction program in 2017, as per the 2012 Ontario Budget, finally completing the program adopted in 2007 Ontario Budget but suspended by the 2012 Ontario Budget.
  2. That, given the above program is now to end in 2018, Ontario also develop a long-term plan to continue reducing and equalizing the burden of business education taxes across municipalities to an equitable and competitive level.

 

Updated January 31, 2017