Yet, this move is being touted by the City of Peterborough’s finance committee as savings as part of its strategy to get the all-inclusive tax rate increase down from 9.59 per cent to 7.38 per cent. The recommendation will increase the ratio of what commercial and industrial property owners pay from 1.5 times that of residential taxpayers to 1.65, shifting $3 million in taxation to local businesses.
What’s especially frustrating is that this decision appears to have been made on a whim – without consultation with the business community or connection to any particular economic plan. The original staff recommendation in the draft budget was to leave the tax ratio as-is.
Decisions around tax policy should have strategic goals and involve consultations. Fourteen years ago, the council of the day worked with industry associations and businesses themselves to come up with a strategy to increase economic growth in our community. The result was a target commercial and industrial tax ratio of 1.5. Getting there took a decade with gradual decreases in the ratio and included regular input from the business community. The result played a role in the rapid development of employment lands in the city to the point that we now have very few spaces for business to move and grow into.
Local businesses are already paying much higher taxes than residents and we aren’t pushing for anything besides the status quo, which is an established competitive benchmark.
Recognizing that businesses already pay 1.5 times the rate of residents, our recommendation is that the City work to expand our employment lands. We’ve been talking about this issue for the better part of 20 years with little progress and now we’re at a critical tipping point with local industry. I’ve talked with two local manufacturers in the last two weeks who are local success stories and are outgrowing their facilities. We have nowhere for them to expand to and we may lose them in the near future. We also have businesses interested in setting up in the region but we have no suitable properties to offer.
Let’s generate more tax revenue from the business community by expanding our commercial and industrial tax base! As an added bonus, businesses typically use fewer services than residents despite their higher tax rate. It’s a win-win for residents and the City.
Many in the business community are still struggling from a few very challenging years. It has been a tough go for many — businesses, residents, and even the municipality. Everything is getting more expensive. The reasons the City is facing a soaring budget increase — rising labour, fuel, and capital costs due to significant inflation — are the same struggles being faced by our local business community. Many businesses are also struggling to service significant debt incurred during the pandemic, which is now at much higher interest rates with repayment deadlines looming.
We applaud our elected leaders for recognizing that the proposed tax increase will be a significant burden for some in our community and are making efforts to reduce this. Many councils over the decades have faced tough decisions at budget time. There are many unpopular choices to make, which typically fall into two areas — increase taxes or reduce services. Everything proposed in the budget has value, but we elect our leaders to make the tough decisions when the time comes.
It’s an oft-repeated line from elected leaders that there is one taxpayer. Shifting $3 million in tax levy to one group of property owners and calling it savings for another does not give the impression that we are all in this together.
