CFIB: Grand Forks overtaxing small businesses

File Photo

Mayor Brian Taylor says Grand Forks collects $2.3 million in taxes exclusive of a $60 flat tax.

Small businesses in Grand Forks are being overburdened by property taxes says a Canadian Federation of Independent Businesses (CFIB) report.

According to the recent CFIB study, on an average property in the city valued at $204,821, a resident will pay $1569 in taxes as opposed to a business, which will pay $4537.

The report ranked the 160 municipalities in the province, based on how much they tax residents compared to business, with 1 being the worst and 160 being the best, and Grand Forks sits at 37.

CFIB Director of Provincial Affairs for B.C. Brian Bonney says that Grand Forks ranked well above the provincial average of 2.94 to 1.

The report says the total gap between what local residents pay compared to businesses is 2.89 but according to Bonney the municipal gap is about 3.4.

“What we try to use for the purposes of doing media interviews is the gap that the municipality is responsible for,” he explained.

“So when a municipality charges property taxes on a business or resident, the largest portion is the municipal portion, which they determine, but there is also a portion that is provincial.” 

Bonney says that the provincial portion can include, transit taxes, hospital taxes and throughout the province, education taxes. 

“We don’t put that into the figure when we’re talking to (the media) about what the city could do – 3.4 is the city portion,” Bonney said.

According to Brian Taylor, the mayor of Grand Forks, the city collects $2.3 million in taxes exclusive of a $60 flat tax and works in per $1000 of assessment for residential, commercial and industrial.

“49 per cent of that is residential, 22 per cent is industrial, 25 per cent is commercial,” explained the mayor. 

“The commercial at this point in time relative to the residential in residential, so it’s $8 per 1000 in assessment, in the commercial we’re charging $22.91 per 1000 on assessment – those figures are pretty widely divergent.”

“In that $8 and $22.91, we’re collecting on behalf of the regional district, the West Kootenay hospital board, the school, the police, the municipal finance authority and B.C. assessment.”

Of the $22.91 for commercial, only 44 per cent goes to the city and of the $8 for residential, 36 per cent, Taylor says.

Brian Bonney says that given the recent recession, higher property taxes on small businesses is a concern.

“(Small businesses) have high overhead, many small businesses can’t do anything about (it) but they have to keep their prices very low,” he says.

“Over the past couple of decades, municipalities have been increasing the property tax burden on small businesses and their backs are literally up against the wall.”

He says that small businesses have to pay property tax whether they’re making money or not while provincial and federal taxes are based on income.

“Our message to (Grand Forks) would be to freeze the taxes on businesses where they’re at right now and look for ways to slowly reduce the gap over a period of time, without increasing residential taxes,” said Bonney.

If that doesn’t happen within the next two years, the CFIB will call on the provincial government to pass a law that caps the gap at 2 to 1.

Mayor Taylor said that such a cap would come at a cost.

“People have to realize that we’re so close to the bone in terms of cost right now that any reduction in income to the city is going to have to reflect in loss of services,” Taylor said when asked about the proposed CFIB cap. 

Comments