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 20 years later and Ontario has failed to adopt this recommendation to provide tax fairness to businesses across the province.

  • A Toronto commercial property worth $10m pays $28,000 more annually than it would in Halton Region – a 33% premium for no added benefit or service.
  • Toronto commercial properties pay 6.3x more than residential properties of equivalent value. This is a substantial contradiction of the 1.97x commercial-to-residential tax ratio restriction the Province places on municipalities for their own tax rates.
  • London, Waterloo and Windsor businesses pay the highest rates in Ontario – 61% more than Halton Region.

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 was on hold until Ontario balanced its budget in 2018 – a promise unfulfilled. 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 July 7, 2017