Are you one of the many Nova Scotians who’ve recently opened their new property assessment notices? If so, you’re likely reeling from how much it’s increased and what it will mean for your tax bill.
If you’re not a small-business owner, though, count yourself lucky.
Yes, residential assessments are rising. And unless municipalities reduce your tax rate, your tax bill is going to grow. As difficult as this is for many families, there is a pressure relief valve to soften the blow — the province has capped how much your assessment can increase. This year it can’t grow more than 3.9 per cent.
No such luck for the province’s small-business owners. You see, the cap doesn’t apply to commercial properties. So, in Halifax, commercial assessments went up double what they did on the residential side — eight per cent.
But the pain doesn’t stop there. Across the province, property tax rates for small-business owners are anywhere from two to four times the rate for residents.
Here’s what all of this means:
Take two properties on the Halifax peninsula — one residential and one commercial — each assessed at $200,000 in 2011. The homeowner’s tax bill was $2,533. The business owner’s was a whopping $7,574 — about three times as much.
Thanks to the provincial assessment cap, the assessment on the $200,000 home would increase to $207,800 in 2012 and would add another $100 to the homeowner’s total property tax bill. Without the benefit of the cap, the assessment on the commercial property would increase to $216,000, adding another $600 to its tax bill.
That’s the effect over one year. Just imagine how the increases — and the gap between what residents and businesses pay — add up over time.
The province actually reviewed the cap in 2011 — CFIB participated — and concluded the cap “protect(s) Nova Scotia property owners from sudden and dramatic increases in property assessments.”
Wonder what small-business owners think about that? Take a walk down Quinpool Road, pop into a shop and ask the owner.
This pain isn’t happening in isolation. Throw in successive and aggressive minimum wage hikes, skyrocketing electricity rates, an uncompetitive income and sales tax environment, and an increasingly uncertain labour environment, and you start to understand why business owners across Nova Scotia are among the least optimistic in the country.
It also helps explain why we’ve had the lowest levels of economic growth in the country, why our wages trail the national average, why productivity improvements do too, and why we have a population that’s aging but not growing.
Let’s face it, people don’t move to places where there aren’t opportunities; they say goodbye to them. And it’s hard for the business community to create opportunities when they’re struggling to keep their doors open.
Governments at all levels — municipalities included — have a role and responsibility to change this. The taxpayer well is dry. There is simply no more to take.
So governments have to get serious about restraint, priority-setting, and ultimately creating an environment where businesses have the ability to create opportunities.
Fixing the property tax system isn’t going to solve our problems. But I can guarantee you that not fixing it can only serve to make things worse.
Leanne Hachey is vice-president, Atlantic, Canadian Federation of Independent Business.
