London Mayor Ed Holder is applauding a change in Thursday's provincial budget he says will shave some $21 million off local business owners' property tax bills, though the co-owner of a local distillery says it will have no benefit to businesses that rent their locations.

The business education tax, a portion of the municipal tax bill that businesses receive, will drop to .88 per cent across the province.

Some businesses are currently paying more than 1.20 per cent, others are paying less than one per cent, depending on when and where in the province they bought their properties. The varying rates are the result of a move to harmonize the tax that stalled eight years ago under the former Liberal government.

Yesterday's change in the budget essentially harmonizes the rate at .88 per cent for all businesses. More than 200,000 Ontario businesses, or 94 per cent, will see a lower rate.

Holder said the move will lead to a 10.5 per cent reduction in total 2020 property tax levels for London businesses, when the municipal portion of the property tax bill is included.

"This will provide much-needed relief to hundreds of London businesses as they recover from the impacts of the COVID-19 pandemic," Holder said in a statement.

Holder said the change had been recommended by his economic recovery tax force, which was formed in the spring to address the economic downtown in the wake of the COVID-19 outbreak. Holder's statement said the change came after his direct lobbying of the Ford government.

Coun. Josh Morgan, the city's budget chair, also applauded the province's move.

"This is something that the city had advocated for for years, but the pandemic really created an additional need," he said. "Instead of just a fairness and equity argument, it was now a business relief argument at a time when they needed it the most."

Irma Joeveer is the co-owner of Paradigm, a bar and restaurant set to open later this month specializing in the distilling and sale of spirits. She also manages Powerhouse Brewing at 100 Kellog Ln. in East London, where Paradigm will also be located.

Joeveer said she welcomes any effort by government to ease the tax burden on businesses struggling to operate amid a raging pandemic.

However, she points out that many businesses lease their locations, and likely won't directly benefit from a reduction to property taxes.

"There's still a great number of small businesses that will continue to rent ... and their longevity isn't really affected by this change unless in fact the property owner passes along those savings, which is doubtful in most cases."

She'd like to see a similar relief extended to businesses like Paradigm and Powerhouse, which operate in properties they rent.

Chris George owns Douglas Window and Door, a London retailer of exterior windows and doors that employees 20 people. He owns his building on Hamilton Road, so the change will benefit him, but said he couldn't say exactly how much savings he'd see.

"Any tax breaks that are being directed toward small businesses at this time will benefit the economy. Small businesses are really the driving force behind the Canadian economy."

The Ontario budget projects more than $187 billion in expenditures this year, including $30 billion in pandemic-specific spending. It comes with Ontario's biggest-ever deficit, $38.5 billion.