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Industrial property to feel Victoria tax bite

Victoria councillors disagree on how to handle taxation

The typical Victoria business will face a $262 increase in property taxes this year, while the average homeowner will need to dig out another $104 if city council approves new tax rates agreed upon at Thursday’s committee of the whole meeting.

Councillors voted to move forward with a tax-rate option that seeks to pass on equal tax increases to all property classes, although both major and light industry classes will see their rates increase s­ignificantly.

According to city staff, the industrial rate of 10.53 is a 9.71 per cent increase for major industrial property owners and a 7.24 per cent increase for light industrial property owners. All other property classes will see a 3.85 per cent increase in taxes this year.

“Last year, the City of Victoria was mindful of reducing the burden on businesses in order to help a local economy facing serious challenges because of the pandemic,” said Bruce Williams, chief executive of the Greater Victoria Chamber of Commerce.

“Many businesses are still facing challenges, so any tax increase will weigh on them at a time when we need our economy to take flight. The Chamber is reaching out to our members to see how this affects them ­individually, and we’ll take that information forward to ­candidates in the fall municipal election.

“The business community understands that taxes are a tool used by local governments to provide services, but we’re always watchful of councils who try to shift costs to business and industry and away from residents for political reasons.

“Businesses need to plan for expenses, and they expect to be treated fairly. After all, the long-term health of our communities is directly related to the health of our small businesses.”

Last year, the city reduced business taxes by just over two per cent due to the pandemic and the fact that during 2020 the assessed value of commercial property dropped by an average of 5.29 per cent. ­Residential assessed values in the city increased by 2.26 per cent at the same time.

This year, the assessed values increased for residential properties by an average of 15.85 per cent and 5.63 per cent for the average business.

However, property assessments do not automatically translate into a corresponding change in property taxes. That is determined based on what an individual assessment is relative to the average change in a property classification.

If a residential property has a greater than 15.85 per cent increase in assessed value, then that property will experience a higher than average tax change and vice versa.

Council was split on the taxation rates Thursday, with councillors Ben Isitt, Jeremy Loveday, Sarah Potts, Sharmarke Dubow and Marianne Alto voting for the new rate structure.

But Mayor Lisa Helps and councillors Geoff Young, ­Stephen Andrew and ­Charlayne Thornton-Joe expressed ­concerns over the distortion between residential and industrial tax rates. Helps noted it sends a tough message to companies such as Point Hope Maritime, which employs a lot of people with well-paid jobs.

Young said the tax-ratio distortion is a major problem not just for Victoria, but for the province as a whole. He suggested the province will eventually step in to restore balance.

“I think that, eventually, the province is going to fix this problem. They’re going to tell us: ‘You have got to bring it back into line,’ ” Young said.

He suggested the tax ratio might go back to a ratio of two to one at some point — under the option council chose Thursday the ratio in Victoria would be 3.64 to one — and he said the city should start heading in that lower-ratio direction now.

“The recommendation on the floor is the opposite. It’s increasing that distortion,” he said.

Andrew said if the city c­ontinues down the road of ­heaping the tax burden on ­business and industrial property owners it will scare away some of the major and light industrial ­companies.

aduffy@timescolonist.com