Seriously, if you raise my taxes again, I'll bean you with this Jonagold.
There are a lot of mom and pop store owners throughout Vancouver that are watching closely what will be included in the City's 2009 Budget. Their interest lies in whether some civic politicians will honour a commitment to essentially cap future tax increases for commercial property owners in Vancouver.
Each year, as part of the budget making process, the City must determine what types of programs and services they want to fund. They must also determine whether they are going to raise taxes to cover any budget shortfall they might have. Having been through developing three civic budgets, I can attest to the fact it's a grueling process that I wouldn't wish upon even my worst enemies.
In Vancouver, business owners pay approximately 5.5 times the rate that residential property owners do for property assessed at the same value. This imbalance is what convinced the previous council to initiate the Property Tax Policy Review Commission. The Commission was headed by Dr. Stanley Hamilton, a well respected expert from UBC in the field of property taxation.
In past years, Vancouver Council has recognized the tax imbalance between residents and businesses. It adopted an informal policy of shifting about 1% of that tax burden from homeowners to commercial properties on an annual basis.
Unfortunately, this ad hoc process was far too often impacted by the whims of nervous politicians who, although they understood business taxes were too high, were simply afraid of facing the wrath of residential taxpayers. So the gap between businesses and residential properties continued to grow.
When I worked in the Mayor's Office, we decided to go beyond simply shifting 1% from residents to businesses and we actually froze tax rates for all commercial properties. This had the net effect of passing along approximately a 2% increase in property taxes to residents.
When the decision finally went public, I told my staff to brace themselves for what I thought would be the onslaught of phone calls from the public.
Much to my amazement, we barely had any calls. No outraged voters. No nasty voice mails. Silence.
This public's reaction surprised me, but it didn't surprise representatives from Vancouver's Fair Tax Coalition. They're a group of volunteers who for years have been advocating for tax reform at City Hall.
In their presentations to me, they argued the public was light years ahead of the politicians on this issue. The public understood that if mom and pop stores started closing down due to high property taxes, it would mean their local neighbourhoods simply wouldn't be the same.
In his report, Hamilton recommended that Council consider building into the next five budgets a 1% tax shift that would begin addressing the imbalance that had built up over the years. It was supported by the NPA majority and voted against by both COPE and Vision.
The opposition councillors argued that by providing tax relief for all businesses, corporations like the big banks and forestry companies would also reap the benefits. Their preference was to provide no tax shift unless you could exempt big corporations from the mix.
The Vancouver Sun reported on October 22nd:
Robertson said he would follow the tax-shift policy during a first term as mayor, but "beyond that, it's how we continue to make the tax system more fair for business."
However in a post-election interview with the Vancouver Sun Editorial Board, Robertson seemed to waiver somewhat on his previous tax shift commitment.
Now that we're on the eve of Robertson's first budget, it will be interesting to see if he is able to keep his promise to Vancouver's neighbourhood businesses.
His former leadership rival, now senior policy adviser, Councillor Raymond Louie, has been one of the most vocal opponents of the current scheme. During his failed leadership bid, he campaigned against the small business tax relief plan adopted by Council.
This will be the first real test of Robertson's leadership now that he's Mayor. Will he be able to convince all nine of his left-leaning caucus members to support tax relief for Vancouver's small business communities?
If he does, I'll applaud the efforts he's made at taming a few civic politicians who in the past have appeared hostile toward Vancouver's business community.