Major urban centres across Canada currently yield alarmingly high commercial-to-residential tax ratios. Vancouver, Toronto, and Montréal rank as the Canadian cities with the highest ratios of 4.32, 4.13, and 4.00 respectively.
Property taxes are one of the major reasons tenants will choose to relocate from downtown cores. The commercial property class generally and office space specifically are major net contributors to the city that houses them. High commercial property taxes:
• Send jobs and development out of city centres and contribute to urban sprawl;
• Work at cross purposes with hub-and-spoke transit, that brings people to and from downtown cores;
• Penalize investment in downtown office, hotel, apar tment and retail, particularly during periods of high vacancy;
• Punish small and medium size businesses who are tenants (usually under "net leases”) of downtown offices, or drive them out to the suburbs; and,
• Disincent major international tenants from locating in those particular cities.
REALpac believes that cities should work to get to a commercial-to-residential ratio of about 2:1 through gradual reductions in the commercial rate.
Previous Government Submissions
For more information on this issue, or any of REALpac's government relations initiatives, please contact Carolyn Lane, VP, Membership & Communications, email@example.com, 416-642-2700 x.223.