Long before COVID hurt the bottom line of most businesses, many of those on Yonge Street were already having trouble making ends meet because of a taxation system that hits them unfairly. In some cases, this caused businesses to move out, or close down, hurting the vibrancy of our main street.
When it comes to property taxes, the Province of Ontario requires all municipalities to charge a single rate to all properties based on its zoning (residential, commercial, etc). Rather than collecting taxes based on the success of the business, the municipal rate is applied to the Current Value Assessment (CVA) of the property, as assessed by MPAC.
Making matters worse for commercial property owners and tenants, the CVA is set according to the theoretical "highest and best use" of each property. This means a tenant in a small strip mall where a highrise condo could be built is taxed more or less as if that condo already existed.
This issue has long been recognized by Toronto City Council, with calls to the Province to change the system. These were among the concerns driving the REimagining Yonge program adopted by Council last year, and the push to establish a local BIA.
Fortunately, the Provincial Government has now allowed the City to take action. New Regulations were enacted in May 2021 allowing the creation of a Small Business Subclass and the ability to apply unique tax policies for these commercial properties.
The resulting City proposal, going to Council on November 9 with John’s full support, calls for a 15% reduction of property taxes for commercial properties meeting small business criteria. In growth centres, on the waterfront or along avenues, properties must have an assessment of less than $7 million and a lot size smaller than 7,500 square feet (or GFA of less than 2,500 square feet for commercial condos) to qualify. Properties elsewhere in the City must have a CVA less than $1 million.
It is expected that 60% of commercial properties will automatically receive this reduction, helping 25,000 small businesses across Toronto.
Successful small businesses on main streets help to define our neighbourhoods, creating more walkable and better connected communities. For many owners in Willowdale, the extra help can't come soon enough, and it will be very welcome news.