Small businesses are starting to feel extreme pressure from rising property tax rates in Toronto.
As the cost of property skyrockets in the city thanks to the development boom, tax rates are increasing beyond what many believe is a sustainable level for small businesses.
The owner of downtown bistro, Le Select, fears it may fall victim to this trend.
Frédéric Geisweiller, the owner, says that the city needs to step in to prevent his and other businesses from being forced to close their doors or sell to developers.
Geisweiler says he is facing a 55 percent increase on his tax bill, which is based off the hypothetical or potential value of the property, something he says he has no control over.
Le Select's annual taxes would increase to over $203,000 by 2020 if the current rate trend continues.
Joe Cressy, councillor for Ward 20, has helped to table a plan that would create a new tax class for small businesses, including creative spaces like arts and culture facilities.
Unfortunately, the bill cannot be completely passed by the city, but would require provincial permission. The Municipal Property Assessment Corporation (MPAC) controls property value taxes in Ontario cities.
MPAC bases property values off a buildings' "best use," or potential use, rather than its actual standing. For small businesses, this means increased taxes when they're surrounded by dense developments.
In the case of Le Select, the surrounding area is developing extremely quickly. Developments like Wellington House and The Well are adding new density to an area that's been somewhat removed from the condo boom thanks to the old Globe and Mail building.
Similar property tax increases for small businesses along Yonge St. have already begun to push out longstanding stores and restaurants, though some relief has been issued.
How this all plays out may determine whether Toronto will keep its vibrant small business scene amidst the mega developments currently sweeping the city. What it seems proponents of small businesses are searching for is a little balance.
by Michael Ott via blogTO