This week, the provincial government announced a new Interim Business Property Tax Relief program that permits local governments to provide immediate property tax relief for the 2020 tax year. According to the government, it’s aimed at small businesses and non-profits, as well as arts and culture organizations struggling with high lease costs as a result of years of rapidly increasing property values.
Practically, this means municipalities can use a base tax year of 2015 or later as compared to the current taxation year. For example, a municipality where property values began to spike in 2017 could choose 2016 as the base year. There’s also the possibility for a minimum percentage of increase in commercial land value since the chosen base year, as well as the percentage of the exemption by property.
The government press release said they had been working with interested municipalities since January, to make sure they’re aware of the changes. Unfortunately, it’s too little too late for many small businesses who operate from physical storefronts.
As rent becomes more unaffordable, dedicated office space is becoming more rare. Many non-profits and art organizations have opted not to rent a space of their own. Instead, many have staff work from home or co-working spaces. The effects on retail have been devastating, with many shops forced to relocate to smaller spaces, or being pushed further out of the city core.
Sarah Savoy, owner of Much and Little on Main Street told CBC that her rent has more than doubled over the past 18 months and she was forced to relocate to a smaller space.
Many business models that previously ran out of physical locations – like consignment shops – are opting for pop-ups or online-only sales, which drastically changes neighbourhoods. Lists of closing businesses have appeared in blogs like Vancouver is Awesome and Daily Hive where hot new spots to try should be.
The downward momentum is depressing. Restaurant-and-retail is a tough industry to make a profit in; it’s normal to see startups pop up and fail. But what is unique about Vancouver’s situation is that some of the city’s mainstays are throwing in the towel.
Places like West Restaurant + Bar closed January 1 after more than two decades in business in South Granville.
You can, however now get your 7/11 order delivered. That’s not a joke. Gas station food can now be brought to your door. If that’s a sign of where we’re headed as a city, it seems we need a much bigger tax break to turn the ship around.
The actual monetary savings remain to be seen, but there are many businesses in the region who aren’t sticking around to find out.
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 protected]
SWIM ON:
- Back in December, Ada Slivinski wrote that a property tax hike was a tough pill to swallow for small business.
- Daniel Fontaine: What goes up, must come down...except property taxes.
- In UnSpun 53, George Affleck and Jody Vance wondered why Vancouver was facing a 7% property tax hike - and yet nearby Coquitlam is just 0.5%?
