Among Canada’s big cities, Edmonton has the best mix of business to residential tax ratios — meaning that the city is an attractive place to do or locate a business.According to a study by the Real Property Association of Canada, the commercial-to-residential tax ratio in Edmonton is two to one — second only to St. John’s, N.L.., ratio of 1.5 to one.
The dubious distinction of highest commercial tax ratio is Vancouver, with a five-to-one rate of commercial to residential tax.
It is a measure of how tax-friendly a city is, says Michael Brooks, executive director of REALpac, as the industry association for property business investment is known.
“It’s very good news for Edmonton businesses and for Edmonton to attract new business,” said Brooks.
The ratio uses a formula representing the tax paid per $1,000 of commercial assessment versus residential. The balance in Vancouver means that businesses are essentially subsidizing residential taxes to the point that the value of services the city provides exceeds the residential tax base, thanks to the subsidy from business.
That in turn drives business and commercial enterprises away from Canada’s left coast.
“Who’s the beneficiary of Vancouver’s problem? Edmonton and Calgary,” says Brooks.
The study is based on the last three years of tax rates in major Canadian cities.
Vancouver’s unfriendly business tax regime replaces Toronto as the most tax-unfriendly city in Canada for business.
The 2007 Property Tax Assessment and Tax Analysis of 2006 Data was prepared by Altus Derbyshire Realty Tax Consulting.
It also highlights other tax issues, such as the worst effective annual commercial property tax rate in Canada. That title is held by Regina, with more than five per cent of commercial value of business per $1,000 of commercial assessment. Montreal weighs in second at 4.7 per cent.
Regina also has the double-whammy distinction of highest residential tax rates in Canada, with 2.25 per cent of property value going to municipal tax coffers.
Edmonton’s rate is close to one per cent.
http://www.canada.com/edmontonjournal/news/business/story.html?id=8887b851-7cc9-45d1-a2af-00920be7865a
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