Increasing the tax ratio for commercial and industrial properties does not save money, increase revenue, or reduce taxes — it merely shifts who pays more taxes.
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% to 7.38%. 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.
OCC Calls for Forward Looking Investments in Budget 2024 Amidst Economic Challenges Guest Column from the Ontario Chamber of Commerce
In the wake of the Province’s Economic Outlook and Fiscal Review, Rocco Rossi, President and CEO, Ontario Chamber of Commerce (OCC), is calling on the Ontario government to prioritize strategic, long-term investments in the upcoming 2024 budget:
“Ontario’s business community continues to grapple with challenges ranging from labour shortages to inflation to broader economic uncertainty. In Budget 2024, the Ontario government needs to focus on measures that not only support immediate growth but also lay the groundwork for sustainable long-term economic expansion.”
The OCC’s membership encompasses a wide range of industries, each with its unique needs and challenges. However, there are crucial areas where the government’s focus in the 2024 budget can make a significant impact across all sectors. These include:
1. Investing in Workforce Development: To address critical labour shortages, investments to resolve skills mismatches are vital. These initiatives should be designed to close the gap between current workforce skills and the evolving demands of Ontario’s labour market.
2. Enhancing Infrastructure: Strategic investments in infrastructure, including transportation and digital connectivity, can boost immediate economic activity while supporting long-term growth. This includes expanding broadband access in rural and remote areas and upgrading public transit and road networks.
3. Fostering a Business-Friendly Environment: Implementing policies that reduce red tape and create a conducive environment for business growth is essential. This includes reviewing and streamlining regulatory processes, providing tax incentives for businesses looking to expand or relocate to Ontario and targeted supports for indebted small business.
4. Supporting Innovation and Technology: Encouraging the adoption of new technologies and supporting innovation can help Ontario businesses remain competitive in a global market. This includes providing incentives for research and development and supporting technology-driven sectors.
“The OCC welcomes the Province’s commitments in its 2023 Ontario Economic Outlook and Fiscal Review across crucial policy areas, including housing, health care, investment attraction, workforce, and infrastructure, which will have positive implications for the economy. Notably, the new Ontario Infrastructure Bank (OIB) has the potential to unlock private investment in infrastructure, including affordable housing, which has been indicated as a top priority for the bank.”
The OCC remains committed to working collaboratively with the government and its members to advocate for policies that bolster the province’s economic health and ensure a prosperous future for Ontario.
The Peterborough and the Kawarthas Chamber of Commerce is an active and engaged member of the Ontario Chamber of Commerce.
Data is worth more than $100 billion globally, a figure that is quickly increasing.
That’s just the value of what we can directly monetize. Its value goes well beyond that, playing a critical role in life and business. We use data for everything from picking television shows to planning growth in our communities.
Good quality data can be priceless. The more detailed and the more local the information, the greater its impact. At the Chamber, we rely heavily on data to better understand business and economic challenges and create forward-thinking policy that will better position our business community for the future.
One way you can help is by completing the Ontario Chamber of Commerce (OCC) Business Confidence Survey. This annual survey of businesses across Ontario offers a benchmark on the business climate. It’s your opportunity to have your voice heard on the issues that matter most, including priorities for economic growth, labour shortages, technology, climate change, and confidence in the economy and your own organization’s success.
Data from the Business Confidence Survey is used in the OCC’s annual Ontario Economic Report and its advocacy on policy priorities for the year ahead. As well, chambers, boards of trade, and other organizations use that data to inform their understanding of the challenges and opportunities facing businesses.
The more local participation we have in the survey the more local the data we access. Otherwise, we are relying on data aggregated from across Ontario. Please take five minutes and complete the Business Confidence Survey here. The deadline for submissions is Nov. 21.
Nearly two years ago, the Canadian Chamber of Commerce (CCC) launched its quest to democratize data with the Business Data Lab (BDL). The BDL brings together the latest data from various sources to track evolving market conditions in user-friendly modules. It’s a powerful tool that makes accessing current data and analysis easy for businesses and organizations — and it’s free!
Last week, the CCC announced an expansion of the BDL Business Conditions Terminal. This tool offers up-to-date and historical data on:
• Sentiment and outlook
• Business activity
• Business dynamics
• Financial conditions
• Transportation and tourism
• International trade
• Environmental practices
It also includes an executive summary section offering a brief summary on each topic as well as a rating on its conditions.
Currently, the BDL is seeking renewed support from the federal government to keep this valuable tool functioning at its best. We have signed a letter urging the Government of Canada and the Honourable Rechie Valdez, Minister of Small Business, to continue supporting BDL's mission and tools.
Locally, we need you to subscribe and read our weekly newsletters to get the latest information and find opportunities to offer your input on Chamber initiatives and priorities.
We desperately need more housing, but it’s not good for our long-term sustainability to tackle the issue as housing at all costs.
Lack of housing opportunities is creating significant challenges and anxiety among businesses and our community as a whole. We have already become too expensive for some to live here and the problem seems to be getting worse.
It’s understandable that all levels of government are fixated on creating more housing — as they should be. But we need to make sure we don’t lose perspective of the vision our communities need for the future.
We need more employment lands to go along with our population growth or we risk becoming an expensive bedroom community.
Not only will servicing more employment lands build a stronger local workforce, but it offsets the tax burden placed on homeowners. Commercial and industrial property owners in Peterborough pay 1.5 times the tax assessment rate of residential homeowner. While they desperately need basic municipal services like water and sewer — they use fewer services overall.
Municipalities can generate more revenue with fewer expenses while growing our local economy by servicing employment lands.
But we have essentially run out of serviced employment lands. There are a few pockets here and there, but local opportunities are slim. This is not just a City problem — we need to approach this as a region. There is a long history on this subject and it comes with a lot of baggage. It’s time to step back, look at the bigger picture, and come back to the negotiating table with all options as we try and work collaboratively to grow stronger as a region.
Currently, the City of Peterborough’s Official Plan is holding back much of these negotiations from even starting. Section 6.1.7 a) states:
Municipal utility services, sanitary sewer and water supply shall not be extended beyond the City boundaries, except in the case where such infrastructure is to serve City owned facilities such as the Peterborough Airport.
It does go on to provide a couple exemptions, but this statement is very limiting to not allow the municipality to even consider servicing land not within their boundaries or land they don’t own.
The City of Peterborough already has servicing agreements with the County and several townships on services like long-term care, emergency medical services, social services, and policing. Why is it a non-starter for water and sewer? Municipalities across Canada have water and sewer shared service agreements, enough so that the Federation of Canadian Municipalities offers a template service agreement for municipalities to use. Providing water and sewer service is expensive, but it’s not unreasonable to create a shared service agreement that covers the costs of this and provides financial benefits to all parties.
The message this section of the Official Plan sends is that if you’re planning to work out an agreement for serviced employment lands with the City of Peterborough, you’re really negotiating the terms of having your land annexed.
Annexation may or may not be part of the solution. The same goes for serving development outside city limits. The solution to our employment land shortage will have to be negotiated collaboratively between all parties with the understanding that it will benefit all, regardless of which municipality is collecting the tax revenue.
The City of Peterborough is undergoing a review of its Official Plan. Much of this review is focused on the back-and-forth between it and the Province to create more housing. One consequence of this back-and-forth is the potential loss of the few future serviceable employment lands within City limits.
Now is the time to rework the Official Plan and the Peterborough and Kawarthas Chamber of Commerce is strongly urging the City of Peterborough to completely remove section 6.1.7. We are advocating that both the City and the County work together in good faith to create an employment lands agreement. This will open more opportunities to build housing, create more property tax revenue, and grow our local economy.
The Peterborough and the Kawarthas Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community.