Note: This column was originally submitted to The Vancouver Sun on November 12, 2013.
Nobody is crazy about paying taxes but the Canadian Federation of Independent Business makes more noise about it than most people.
Major media in BC give them a regular platform to complain that business property taxes are too high, property taxes are going up too fast and local government employees are overpaid loafers.
The CFIB was at it again in the Vancouver Sun on November 7th. They claim that small businesses are stuck paying for a disproportionate cost of new services and that “municipalities must embrace and seek feedback from local entrepreneurs and not just regard their small businesses as a source of revenue.”
Let’s have a look at a few of their points. First of all, is business overtaxed in British Columbia? KPMG publishes an annual guide to business location costs. They found that when it comes to taxes, Canada is second only to India when it comes to tax competitiveness. The KPMG survey also looked at 113 cities from 14 countries and found that Vancouver came second only to Chennai, India.
In June 2013 Vancouver Sun business columnist Don Cayo looked at the CFIB complaints and found they were not as cut and dried as the CFIB claimed. First, while business property taxes are higher (sometimes significantly higher) than residential property taxes, businesses have an advantage that residential taxpayers don’t: Businesses get to deduct their property taxes from their income tax liabilities. Those savings can be significant. And, Cayo states, “Businesses may not directly use things like parks and recreation centres, but they often gain huge direct and indirect benefits from their proximity to community amenities. They also tend to create more traffic and hence more strain on things like roads, parking areas and even sidewalks.”
Next look at the argument that business is somehow shut out of discussions in local governments. Look at your own community and you will probably find business is, in fact, over-represented on boards and councils.
The CFIB complains that municipalities “have become more than the stewards of roads, sewers, sidewalks and traffic signs. They have expanded into other areas, taking on responsibility for all manner of programs and a wide range of social services traditionally managed by provincial governments.” This makes it sound as though local governments are expanding their reach, when the reality is, senior governments in Victoria and Ottawa have systematically withdrawn from providing services, leaving responsible local governments no choice but to pick up the slack—without the financial resources formerly provided by the provincial or federal government. This is called “downloading.”
As the American jurist Oliver Wendell Holmes said, “Taxes are the price we pay for a civilized society.” It is a concept the CFIB might try to remember.
Mark Hancock is President of CUPE BC, the largest union in BC. CUPE BC represents 85,000 workers in almost every community in BC.