Ada Slivinski: Already a tough place to run a small business, Vancouver is making it even harder.
Property taxes are going up in Vancouver. The City just approved an increase of 7 per cent for 2020.
It’s less than the original 8.2 per cent originally proposed, but still small comfort for business owners leasing commercial property where they are stuck with the bill, known as the triple net lease.
For residential properties, passing the property tax bill to the renter is illegal, but it still flies for commercial properties. Additionally, the assessed value of these properties is often much higher than the actual space used because of the potential redevelopment value and tenants are stuck with the bill. For about a $3.6 million dollar commercial property, the property tax increase would be about $1,500 per year.
It may not seem like a lot for “big businesses,” but if you look at ventures like restaurants or apparel shops with a profit margin generally between 4 and 13 per cent, they will have to sell around $30,000 worth of goods just to make up the difference. That’s a lot of money for a small business.
It’s something I often hear meeting with my small business clients. They feel squeezed from almost every angle and it’s the reason we see so any family-owned businesses and small shops shut down. From Robson Street to Kerrisdale the city’s business demographic has changed dramatically over the past few years.
I’ve spoken with small business owners – like Brian Wener of Tuesdays Dry Cleaners in Kitsilano – who said if they had to do it all over again and open another business, it wouldn’t be in Vancouver. That’s devastating news.
It seems only the big businesses and chains can afford to stay afloat. The ripple effect that has on the city’s economy cannot be denied. From fewer job opportunities for young people in retail or the service industry to lost clients for the accountants, bookkeepers, graphic designers and other contracted specialists who worked with them.
A healthy, vibrant society and economy needs small, medium-sized and big businesses. They complement each other and all provide different experiences for both customers and those seeking employment.
Of course, part of the city’s rationale for the tax increase is that money will be used to help those in need, but the hard-working small business owners are the ones getting squeezed out.
We can’t afford the wait and see approach. Vancouver’s small businesses need solid tax relief now.
Ada Slivinski is the Founder & Principal of Jam PR, a boutique agency focused on helping small businesses get big exposure. You can reach her at email@example.com