Tax trend unsustainable: Victoria chamber of commerce

Municipal taxes, school taxes, and transit taxes are increasing every year, leading to a “worrying trend,” according to the Greater Victoria Chamber of Commerce.

“Even if the municipalities hold the line, we’re still going to have property tax increases,” said Bruce Carter, CEO of the chamber.

“We need to look at a holistic approach. The overall bottom line cannot be more than the rate of GDP growth.”

According to the chamber’s numbers, mill rates in the region have increased by an average 3.1 per cent. That compared to the economy’s predicted growth at 1.7 per cent, and average household incomes at just over two per cent.

This year, Victoria council approved a tax hike of seven per cent for residents and three per cent for businesses.

A business in the city benefits from the highest traffic but also pays the highest taxes in the region: a business with an assessed value of $774,000 pays $17,802 in tax. Oak Bay, by contrast, offers the lowest tax in the region. The equivalent-sized business pays $11,257 in tax.

The Urban Develop Institute shares similar concerns.

“Commercial property owners downtown hear constant complaints from their tenants that operating costs are simply too high,” wrote UDI’s Marie Savage, executive co-ordinator for the Victoria branch, in a letter to Victoria city council.

“The lion’s share of these costs is property tax, causing commercial tenants to rethink moving in to the downtown core or to relocate their existing businesses elsewhere.”

Victoria Mayor Dean Fortin admits the tax trend is “to a certain extent unsustainable.”

To address the problem, he’s hosted a series of budget talks in neighbourhoods to get public input.

“Do you look at corporate naming rights? … Do you look at destination casinos?” asked Fortin, adding most people don’t like these revenue-generating options.

“We need to recognize that senior levels of government have been downloading services onto the municipalities,” he said. He proposes alternative forms of taxation as one solution. By way of example, he suggested linking gas tax to public transit funding, or personal property sales tax to affordable housing initiatives.

At the local level, Victoria’s commitment to fund affordable housing “is a great way to lower your costs related to policing,” Fortin said.

Carter had his own suggestions for stemming runaway taxation.

Municipalities need to find more efficient ways of service delivery, he argued.

For instance, municipalities could form a joint garbage utility, instead of each collecting its own garbage, he said. Road work is another example of potential partnerships, to share resources and expertise.

“Do we really need a public works yard in Oak Bay, Victoria, Esquimalt and Saanich?” he asked.

rholmen@vicnews.com

 

Mill rate defined:

The dollars of tax paid per $1,000 of assessed property value.

 

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