City looks to cut small business property tax by 10%
Tax cut would be paid for by hiking taxes on big-box, large commercial properties
The City of Ottawa is looking to cut property taxes for small businesses by 10 per cent, and pay for it by increasing taxes paid by big-box stores and other large commercial properties.
Some 4,700 small commercial properties might save $1,000 to $1,500 on their average $15,000 tax bill, and be required to pass along the savings to the businesses that rent space from them, Mayor Jim Watson explained in a Friday news conference.
Residential taxes wouldn't be affected, but 7,300 big commercial properties would see their taxes rise less than a percentage point, according to a plan that will go before council in April
"That means that multinationals like Walmart and Costco, who have done very well during the pandemic, are going to help pay for this tax discount to small businesses," said Watson.
It's one of few tools the municipality has to help small businesses hit hard by COVID-19 shutdowns, and possibly the one with the most impact so far, according to the Ottawa Coalition of Business Improvement Areas.
"It's a way of directing a little bit more money to small business at a time when they most definitely need it," said chair Mark Kaluski.
New tax tool comes from Ontario
The Ontario government first announced in its 2020 budget that it would give municipalities the ability to create an entirely new subclass of commercial taxpayers to help small businesses.
Cities are still waiting for provincial regulations allowing it to do so, so the new tax classes would only take effect in 2022.
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Toronto councillors urge province to release rules that would pave way for small business tax relief
Kaluski was a bit disappointed the government didn't get the new regulations in place for this tax year.
"There's a sense that next year, there might be more bankruptcies and vacancies to deal with."
When it does take effect, the new small business tax discount is to be permanent.
"I think it's a long-term view in terms of giving that relief to small businesses — something they probably have needed for a long time," explained the city's chief financial officer Wendy Stephanson.
The city will consult the commercial community, but the discount would likely apply to properties up to 15,000 square feet. It's anticipated most small offices, small retail, restaurants, motels, assembly halls, daycares, and marinas would receive the 10 per cent cut.
City employees to go back to work
Staff will have a plan ready by summer to start returning municipal employees to offices so they can help support those shops and restaurants that have been struggling.
About 4,000 of 17,000 employees have been working from home.
The mayor is also lobbying hard on behalf of the Ottawa International Airport, which has seen a big reduction in flights to the find extra government funding to afford its Stage 2 LRT station, and to help it resume international flights.
The city is making plans to cut rental rates by half at city buildings, such as Shenkman Arts Centre and the Horticulture Building in September to help musicians and festivals.
Much, however, will depend on the spread of COVID-19 and vaccinations.
