Don Cayo
Sun
With their property tax bills up 40 to 60 per cent this year — and in some cases on top of double-digit increases last year — dozens of small and medium-sized businesses in the District of North Vancouver are starting to wonder if they want to stay.
The size of the bills came as a nasty surprise to many because the district had lowered its mill rate a smidgen this year. A lot of the hardest-hit businesses are tenants who pay the tax bill as part of their rent, so they didn’t see the notices of sharply higher assessments on the strata warehouse units they occupy.
Most of these individually owned spaces in large buildings are used for some combination of small offices, storage, and repair or assembly shops. The tax increase is so large that the continued viability of some of the smaller firms may be threatened.
Even more threatened, I think, will be the district’s ability to hold onto its many small- to medium-sized service and supply companies.
It isn’t easy for a company to pack up and move its equipment, inventory and staff. But Greg Stromotich, owner of Koko’s Gourmet Pet Foods, tells me he fears an exodus is under way. Big box stores have already taken over several North Van areas that once were home to smaller businesses like his, he said. And now the tax hike is forcing him and many others to think about pulling up stakes and moving to a more business-friendly community.
The district council seems to have taken pains this year to divide its tax increase — 3.75 per cent in the total amount it collects — evenly among all classes of taxpayers. So the general business category, the one that covers the hard-hit businesses, is, as a group, paying only 3.75 per cent more than last year thanks to a combination of a slightly lower mill rate applied to a modest increase in total appraised value.
The problem is that the category is broad — it includes things like hotels and restaurants, as well as warehouses and repair or assembly shops. And the increase in assessed value was anything but slight for some businesses in the category — the ones located in those briskly traded strata units that command an ever-higher selling price.
A number of businesspeople, like Bill Donaldson of Donaldson Ropes Ltd., have been seeking a meeting with Mayor Janice Harris for more than a week, and on Thursday she agreed to meet with them. But she told me in a phone conversation that she doesn’t know what she can offer by way of short-term relief. And, for that matter, neither do I.
The appeal period is over, and the several appeals that I know about have all been lost, which suggests the soaring assessments reasonably reflect current prices.
Harris said a lot of other North Van businesses in the same category have seen their tax bills go up only three or four per cent this year — comfortably within the ballpark you’d expect given the modest increase in the district’s overall budget.
So it’s hard to argue that there should be a large and sudden decrease in this category’s tax rate. It would mean windfall savings for a lot of businesses whose assessments haven’t soared, and it would increase the burden on other categories of taxpayers. That’s especially unlikely to happen given that the district lost $1.1 million in budgeted revenue this year when, in a completely unrelated case, Western Terminals won huge concessions in a court appeal of its tax assessment.
Mind you, there’s still a case for an urgent and serious review of business tax rates in the district.
Two years ago, a Canadian Federation of Independent Business survey showed North Van’s business tax rate to be 3.37 times greater than its homeowners’ rate. That compared poorly with a provincial average of 2.42 times higher. And since then, the ratio has grown to 3.92 times greater — one of the worst in B.C.
Fixing this ratio will require a commitment over time, so it won’t do much for businesses hit with a too-big-to-swallow increase this year. But the council should still waste no time making a commitment to rein back its business tax levels to be in line with province-wide norms. This would at least give hard-pressed business a little confidence that things should get better in the long run if they’re able to tough out this very difficult year.
© The Vancouver Sun 2005
