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October 27, 2017 10:21 pm

‘Tax Gap’ in P.G. Not out of Line Says CFIB

Monday, June 20, 2016 @ 10:07 AM

Prince George, B.C. – When it comes to the difference in what business and residential property owners pay in taxes, a new report indicates Prince George is about the middle of the pack   among B.C. communities.

It’s called a tax gap, and represents the difference between what residential and business property owners pay in taxes based on the same assessed value .

According to the Canadian Federation of Independent Business,   the “tax gap” in Prince George is 2.05 meaning a commercial property owner pays   just over two times what a residential property owner would pay.

CFIB’s B.C. economist, Aaron Aerts, says the P.G. “gap” is not out of line “We think Prince George is at a number businesses feel comfortable paying. When you look at some other municipalities, like Vancouver, where it’s 4 times what residential properties pay,   that’s where we have a really significant issue for businesses.”

Aerts recognizes demographics are an important consideration when a City sets its tax rates, with an aging population and more residents on fixed incomes, but says business has its own challenges “Businesses also have restraints,   a property tax is profit insensitive whether you have a lot of money or no money at all, essentially you are going to have to pay that property tax. It’s not adjustable like an income tax which is based on an income for that year. So, many businesses have thin margins, and if you have a significant property tax burden that’s going to   be difficult to absorb.”

The Provincial average is 2.60 however the average among communities in Northern B.C. was 2.69.

Terrace had the worst tax gap among Northern communities at 4.97, Fraser Lake was next at 4.54 and Kitimat was 4.13.

The   northern community with the lowest tax gap was Mackenzie at 1.45.

“61% of our membership say that it’s the most harmful type of tax they have to deal with because it’s profit insensitive” says Aerts “If you want to encourage business growth, a good way to do it is to try and shift the tax balance.”


What a great idea. Shift the tax balance. Hmmmm wonder where they would want to shift it, perhaps to residential tax payers. In other words have residential tax payers subsidize business.

Perhaps they could make a better case if they gave us some specifics in regards to profits instead of dealing with generalities, and using phrases that don’t mean anything. Phrases like **thin margins**

61% of their members members say it is the most harmful type of tax they have to deal with. My guess is that these business’s are the ones that make the least profit, and therefore feel the tax crunch more that those business’s that make huge profits.

The real reason we have to pay huge taxes, is the high cost of running this City, with all the staff, benefits, etc; etc;. Lets shine the light where the big money is being spent, and see if we can reduce some of the costs. If we could, then we could also reduce taxes. Hmmmm what a great thought, reduce taxes.

    Well that’s the whole issue. Property taxes are indifferent to ability to pay. You can be a pensioner in a million dollar home or a millionaire in a trailer park, the tax is based on the value of the property, not the income of the owner. The presumption is, if you can afford a property of that value, you can afford more taxes.

    If a business is not profitable enough to pay the property taxes, then it should close it’s doors, and make room for one that is.

    And if you’re a pensioner in a million dollar home, you should sell it if you can’t pay your property taxes.

    Now, keep in mind, the pensioner does have the option of deferring property taxes till they die or sell their home, the business has no such option.

For every percent our taxes go up the pay to all city managers, mayor and council should decrease twice the increase rate. That may give them some incentive to be not so wasteful with our tax dollars…

Prince George, B.C. – When it comes to the difference in what business and residential property owners pay in taxes…… The biggest difference is the businesses just pass the cost of the taxes onto their customers . Residential property owners have no one to pass it onto .

    Ataloss, you state:

    “The biggest difference is the businesses just pass the cost of the taxes onto their customers.”

    I am sure that you will agree that passing the costs onto their customers also applies to the cost of our Public Service! All increases in the cost of our Public Sector, be it wage increases, benefit improvements, pension enhancements and increased staffing levels are all passed onto their customers, the taxpayers!

    The only difference is that the customer of a business has the ability to negotiate a price with a business and walk away if unsatisfied. With the costs of our Public Sector, we, the customers, have no ability to walk away! We are, in effect, held hostage to the cost of our Public Sector!

    Wouldn’t you agree?

      No I don’t agree . You left out inflation and if one doesn’t like the taxes paid for civil society . one can always move to a less civil society and live in fear behind security bars . Like in the states or Mexico or other low tax countries .

      You seem to be defending increases in the cost of the Public Sector due to inflation. You also seem to have little if anything to say in defence of private business, but would you not agree that inflation is also a factor in the pricing and operation of a private business?

      I have in the past, posted links showing public sector costs increasing at a rate higher than the cost of inflation, or don’t you remember?

      By the way, this morning I read that an interesting comment on the new GM Bolt EV and how car companies will have to sell a certain percentage of their fleet as EV’s to meet mandated fuel economy targets and how these money-losing but necessary compliance vehicles will be threat to Tesla as Tesla is currently losing $15,000.00 U.S. per car today!

      How are your shares in Tesla doing? Hang on to them!

      I generally don’t read your stuff HG because it’s mostly misleading hyperbol . Obviously you don’t read much of mine . No tsla shares at all . For the last time . I’m into financials and they are doing great . The banks are making money hand over fist . My best performers have been the credit card companies , REITs and insurance/reinsurance company ETFs .

      You generally don’t read my posts and yet you read these! Thanks!

      What if find interesting is how you ignore questions that go against your way of thinking!

      You brought up “inflation” in defense of increases in public sector spending! I put forth a really simple question for you and as usual, you ignore it because it forces you to consider more than just your own opinion!

      let me ask again, if you think that inflation is a factor in public sector spending, would you not also agree that inflation is also a factor in the pricing and operation of a private business?

Cities tend to look at taxes and service fee’s as a **money tree**. Anytime they want more money they just go to the tree and pick some.

We have some pretty ingrained thinking in this Country. How is it that most cities cannot seem to control costs or reduce taxes. All they do is increase costs, and increase taxes.

When you consider the millions of dollars we pay for the administration of running this City you would think at some point we would get to the point where we could start to reduce costs.

These people are being paid big dollars to be innovative and creative. If all they can do is increase costs and taxes, then they are extremely over paid for what they do. We need some indication that they are in fact earning their money.

    Tens of millions and apparently over nine hundred employees. It is a huge money gulping institution. Its size can not be pared down, the entitlements are too deeply enshrined. It does not have to make one cent profit to justify its bloated existence. Just heard today that only about 10% of working Canadians will retire with an employer pension plan…public service employees have all the goodies. The private sector has been falling far behind for the last quarter century.

    A moose can survive only if ticks do not suck more blood than it can replace. Just saying!

      There is definitely little motivation to get the tick population under control. Even worse is that the tick population seldom has any concern for health and wellbeing of the moose!

    “These people are being paid big dollars to be innovative and creative”

    Where on earth did you get that idea from? That is not in their job description.

It isn’t the tax rate that really bothers people, it is what you get in return. Bad roads, failing infrastructure and a continuous policy of red tape.

You want to build a new subdivision in PG? Sure, just try and get the zoning.. and if you are so lucky, the city demands you build an entire new blvd to your new area, even if there is an existing one nearby. They gouge, they are impossible to work with.. and they have no idea how to tender a job.

    That’s my point. Is anyone at city hall working to see if some of these problems can be solved?? If not why not.?

      Easy. There is not one person I know of who has any credible experience in the areas required to educate some of the developers of how to design reasonable modern subdivisions with a variety of housing densities integrated together into a single neighbourhood around local shopping and other conveniences such as one can find in the southern part of Kelowna.

    Good Lord!!! …. the problem is everyone and their dog can get a subdivision approved.

    What the City does not adhere to is some sort of orderly infill development. They continue to allow sprawling subdivisions.

    THAT is the main problem. The other problem is that the developers have no understanding of good design. They build cheek by jowl row housing in such locations as 5th and Tabor which will be the Upland villages of tomorrow.

    There is no one building reasonable medium density housing in some sort of cluster design. The variety of housing developments on sees in the Okanagan are simply not to be seen around here.

    The City does not build this junk. The developers are.

      I’m not defending the developers, but perhaps Okanagan style housing developments don’t exist here because the market here simply isn’t prepared to pay the higher costs that the market is willing to pay in the sunny Okanagan!

      Take a look at the price of homes in Kelowna and then ask how many residents of Prince George would be willing to pay those kinds of dollars for a house here!

      Absolutely bang on!

      Hart Guy, those types of developments can be found in many places. After living away from PG for a while, I think I can safely say that development standards in other areas of the country far exceed those found in PG. you just have to drive around and observe new subdivisions to see the differences. And no, not all of them come in at Okanagan prices.

“a new report indicates Prince George is about the middle of the pack among B.C. communities”

This is the sort of BS we get every year. The only thing they got right is that in 2015 PG had a business tax class multiple of 2.05.

When looking at the 707 table of 2015 Assessments, Tax Rates, Municipal Taxes and Class Proportions of Taxes and Assessments for BC, including every municipality, the actual data shows that:

The average multiplier is 2.61
The median multiplier is 2.49
The maximum multiplier is 4.97
The minimum multiplier is 1.0

That is a list of 161 which includes the largest municipalities right down to the smallest, Zeballos, with a population of 110.

In that list Prince George is 34th when the median of the list is 80.

There are 3 municipalities which have a multiplier of 1.0. All others are larger.

To say that PG is about the middle of the pack is totally false. Anyone with the table in front of them and a bit of detailed review of that table would pick that up.

So why is the CFIB making false statements about PG?

Simple. The PG Chamber lobbies every year to ensure that the business class tax rates do not increase. If one shows that the PG business class rates are among the lowest in the province, they can keep up that false pretense.

Too many special interest organizations are either pulling the wool over people’s eyes or simply do not have competent people working for them.

I wish the City would come forward and counter the BS being fed to the PG citizens by the CFIB.

Here is a list of 48 municipalities which have a variation of populations. It shows the business class multiplier or ratio to the residential class.

Prince George is 7th down that list, nowhere near the middle. Quesnel is in the middle with a multiplier of 2.86.

With cities of comparative sizes Prince George is second lowest, only surpassed by Chilliwack. That fact is well known to people who study such tax burden data. It has been that way for a very long time.

So, if business wants to move away from PG because of the “high” tax burden, they really do not have much of a choice of where to move to. That is the reality of the situation and it is time someone stood up to the Chamber on that annual propaganda they produce.

1.45 Mackenzie
1.60 Osoyoos
1.60 Penticton
1.98 Chilliwack
2.00 Trail
2.04 Nelson
2.05 Prince George
2.13 Kelowna
2.19 Williams Lake
2.27 Langley
2.36 Hope
2.39 West Kelowna
2.45 McBride
2.49 Nanaimo
2.55 West Vancouver
2.61 Kamloops
2.63 Houston
2.65 Cranbrook
2.74 Vernon
2.75 Maple Ridge
2.80 Princeton
2.81 Fort St. John
2.82 Surrey
2.85 Quesnel
2.87 Port Moody
2.97 Langley
2.97 Delta
3.03 Merritt
3.03 Vanderhoof
3.12 Victoria
3.17 Richmond
3.25 Dawson Creek
3.35 North Vancouver
3.40 Saanich
3.40 Lillooet
3.42 Castlegar
3.44 Fort St. James
3.48 New Westminster
3.49 North Vancouver
3.49 Prince Rupert
3.61 Smithers
3.82 Revelstoke
3.98 Burnaby
4.00 Whistler
4.15 Vancouver
4.54 Fraser Lake
4.83 North Saanich
4.97 Terrace

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