Victoria taxes: Homeowners up 4% vs. 1.1% for businesses

In a balancing act that’s infuriating critics, councillors retool how tax is collected

Victoria homeowners opening property tax notices this week might be in for sticker shock, with city council deciding to increase residential bills more than business ones.

City council, which prides itself on early budget work, had by January settled on a 2018 preliminary budget that included a tax increase of about 2.62 per cent, raising an additional $3.3 million in revenue and in line with city policy limiting tax increases to inflation plus one per cent.

But city council has opted to redistribute how the increase is collected. The decision means a four per cent increase for residential properties versus 1.1 per cent for businesses.

That translates to an increase of $94 for the average residential property assessed at $743,000 and of $75 for the typical business property assessed at $585,000.

Had the 2.62 per cent increase been applied equally, the residential increase would have been $61 instead of $94 and the business increase would have been $175 instead of $75.

Stan Bartlett, chairman of the Grumpy Taxpayers of Greater Victoria, said he was surprised by the residential increase — first becoming aware of it when the details were pointed out to him in the pamphlet that accompanied his property tax notice.

“I thought the city believed in transparency,” Bartlett said.

“We were led to believe in [Mayor Lisa Helps’] interviews on the preliminary budget that a zero-increase budget was possible and council’s target was inflation plus one per cent. The lay of the land has certainly changed since then.”

Charging residential taxpayers more was proposed by Helps, and supported by councillors Margaret Lucas, Marianne Alto, Charlayne Thornton-Joe, Chris Coleman and Geoff Young. It was opposed by Ben Isitt, Jeremy Loveday and Pam Madoff.

Coleman said that without the redistribution, businesses would have been taxed at 3.69 times the residential rate.

“Doing it this way at four per cent to residential and 1.1 to business actually brings it down to about 3.5 [times] to one.”

For about 20 years, businesses paid taxes at 2.5 times the residential rate.

“To protect the residential component, we kept on increasing the business class,” Coleman said. “It’s just we’ve been loading it on the businesses over the years and they are seeing some stress as well. It’s always a balancing act between the classes.”

Jeff Bray, executive director of the Downtown Victoria Business Association, lauded the move, which he said is a small recognition of some of the issues downtown businesses have faced in the last year, such as disruptions due to construction and changes to provincial taxation.

“We felt that businesses pay almost half the taxes for the whole city, and given that assessments hadn’t gone up and all these other challenges, we felt this would be just another potential hit,” Bray said.

Isitt argued the shift is unfair and amounted to little more than a handout to the business community in an election year.

Isitt noted that like businesses, residents’ costs for things such as auto insurance, electricity and some food items have increased.

“Residential ratepayers are being squeezed in a serious way and … they are, I think, least able to absorb these costs because they live on fixed incomes,” Isitt said during a committee debate.

“Business people, by and large, have larger incomes, larger disposable incomes and are therefore better positioned to absorb tax increases.”