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With Vancouver set to raise property taxes, small businesses wonder who will foot the bill

Last Updated Dec 10, 2019 at 11:34 am PST

Downtown Vancouver is seen here from the NEWS 1130 Air Patrol in November of 2019. (Riley Phillips for NEWS 1130)

With Vancouver city council set to raise property taxes, some are wondering who will ultimately pay the higher costs

The city has proposed an increase of 8.2 per cent in the coming year, which will be debated in council this week

VANCOUVER (NEWS 1130) – As Vancouver prepares to bump up property taxes, there’s one pitch to make the change more affordable for commercial tenants — pass the hike on to landlords instead.

The city has proposed an increase of 8.2 per cent in the coming year, which will be debated in council this week. Homeowners are already balking at the possible costs, and small businesses are now wondering who will end up footing the bill.

Economist Alex Hemingway with the left-leaning Canadian Centre for Policy Alternatives says passing the higher costs on to landlords would ease the burden on businesses.

“When there’s a spike in the value of a commercial property, the owner of that property is benefiting enormously from those wealth gains, from the rise in land value, but it’s actually the small business tenant that’s having to pick up the property tax bill,” he says.

“There’s a fundamental imbalance there. The owner, who is enjoying those large gains – I think it makes sense to people that they should also bear that property tax bill. They’re benefiting from very large land value gains and they can pay their own property tax bills. We should require that the same way we do in residential tenancies.”

RELATED: Vancouverites ‘overwhelmed’ by proposed tax increase, councillors say

The Canadian Federation of Independent Business is skeptical, however, suggesting landlords would just pass that increased cost along through higher commercial rents.

Muriel Protzer with the CFIB says making landlords pay is not a solution.

“The bottom line here is that having an increase of 8.2 per cent is simply not sustainable, not something the economy can take right now, especially our local economy in the city of Vancouver. Certainly they’re going to have to go back to the drawing board, the council and mayor, and come back with a different solution,” she says.

“It might sound nice – okay, we’ll shift it on to the landlords, they’re the ones who get to see the benefit of that property value, eventually when they sell they do take in the lease costs, they benefit from those. But the thing is, new costs get passed down to renters.”

Protzer says in the end, renters will see their costs go up either way.