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Property tax is the main source of revenue for Canadian municipalities and is used to fund services such as road repair, education, recreational programs and public transit. Both residents and business owners pay property taxes, but the rate they pay varies depending on whether the property type is commercial or residential – taxing authorities set these rates at their discretion.

The issue and subsequent argument that arises is the perceived fairness of the different property tax rates paid between commercial and residential taxpayers, and who should proportionally fund more, or less for municipal services – businesses or residents.

The findings of this report are used by Altus Group and REALPAC to create dialogue with taxing authorities about tax fairness, influence public policy and promote a healthy business environment for the real estate sector.

Report highlights

Vancouver remains the only city with a commercial-to-residential tax ratio in excess of 4:1.

For the first time in 14 years, Calgary ranks above the average ratio.

Vancouver, Toronto and Montreal posted the highest commercial-to-residential ratios in the country.

Quebec City’s ratio has been steadily climbing for 15 years.

The commercial-to-residential tax ratio is still far from being fair as we continue to see several cities across Canada shifting the burden of property taxes to business owners. Municipalities should recognize that bringing down the commercial property tax rate is important to help make their cities more appealing to businesses, which helps create job growth and leads to sustainable revenue for the city.

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