Vision Vancouver looks after businesses with tax shift
Think City chair Neil Monckton says Mayor Gregor Robertson’s commitment to a tax shift has led to cuts to public services.
Travis Lupick
Are you in favour of a tax shift from businesses to residents next year?
Loretta Woodcock
COPE park board commissioner
“That needs to be reviewed because it’s ill-timed. Businesses are getting absolutely no increases. The service cuts are the unforeseen casualty or the collateral damage that’s coming out of this. They [council] should review the budget cuts, and based on the seriousness of the cuts in terms of social impacts, they should decide how much they want to increase the taxes. A one-percent tax increase for the city is $5 million. Now what they’re asking from us [the park board] in cuts is $2.8 million.”
Ed des Roches
Cochair, Vancouver Fair Tax Coalition
“I am because it’s gotten so out of balance. This was an arbitrary share of taxes that was set in 1983, and the city has kept the same share of taxes. You’re supposed to make adjustments every year to balance it out, but they never did. So now we’re at a point where it’s a ridiculous share that we’re paying because the relationship between the value of residential properties and commercial properties is so different than 1983. The past council and this council realize that.”
Sean Bickerton
Board member, Non-Partisan Association
“I think it’s a very hard thing for politicians to do this. And I believe that it’s a courageous thing they [Vision and NPA councillors] are doing. I praise them for doing it. I know that COPE is unhappy with them going ahead in doing that. But I personally salute their political courage in continuing that. It’s not an easy one to support. To be a healthy economy, we need jobs. If businesses are paying higher taxes here than anyplace else in Canada, that works against creating jobs.”
Heather Deal
Vision Vancouver city councillor
“We made a commitment a couple of years ago to continue with the shift, and that’s based on a decision that was made many years ago to have 55 percent of the taxes paid by businesses and 45 percent of taxes paid by residents. Businesses pay six times as many taxes as residents. Over 80 percent of the businesses in Vancouver are small businesses with less than 20 employees. We’re hurting the small businesses throughout the city because of an old system of creating taxes.”
Vancouver residents may want to ask the mayor one question today (December 3) when city council holds its final public consultation on next year’s budget. Why do they have to pay more taxes and receive fewer services while businesses get a tax holiday?
Gregor Robertson—then an MLA seeking the Vision Vancouver mayoral nomination—spoke in 2008 in favour of shifting taxes from owners of commercial properties to residential-property owners.
Robertson, a businessman, maintained this position throughout the election campaign, putting him on the same page as his opponent, Non-Partisan Association councillor and mayoral candidate Peter Ladner.
His stand was in direct contrast to the consistent opposition by four Vision councillors to such a measure in the last council under NPA mayor Sam Sullivan. These were Raymond Louie, Heather Deal, Tim Stevenson, and George Chow.
In fact, when Louie ran for the party’s nomination, the councillor pointed out that he was the only candidate who was against the shift. However, after Robertson won the contest, Louie and company changed their view and went on to win new terms.
For Neil Monckton, there’s a need to take a long, hard look at Robertson’s commitment to the tax shift.
The chair of municipal public-policy group Think City explained in a phone interview that not only are residents likely to see services get the axe—including the children’s petting zoo in Stanley Park and Queen Elizabeth Park’s Bloedel Conservatory—they will also take a hit in their pockets while businesses go free.
“The mayor committed to it during his nomination, [and] again before the recession started, and he honoured it for the first budget cycle,” Monckton told the Georgia Straight in a phone interview. “But now we’ve come to this point where we’re seeing closures, and these are false choices.”
Following direction from council, staff have proposed city service reductions totalling $20.2 million.
At the same time, council has set a property-tax-increase target of two percent, equivalent to $11.1 million. In addition to this, residential-property owners will have to pay an additional two percent due to the shift, for a total of four percent.
However, Monckton said that if residents are being asked to shoulder a four-percent tax raise, businesses should also be able to absorb the same rate. He noted that if the shift were stopped, and both residential- and business-property owners paid a uniform four-percent tax increase, the city could raise a total of about $22 million, and there would be no need to slash services.
“That’s really the problem here: we’re undermining the ability for residents to be willing to pay for the services they say they want because when they pay more, all they’re doing is giving businesses a tax cut,” Monckton said.
The Straight asked Coun. David Cadman of the Coalition of Progressive Electors whether it’s Robertson alone who’s driving the policy within the Vision caucus.
“Given the record, you can say that those people, namely Deal, Stevenson, Chow, and Louie, consistently voted against the tax shift, and last year for the first time voted in favour of the tax shift,” Cadman, who wants the redistribution stopped, said by phone. “It was certainly a commitment that the mayor has made.”
Louie acknowledged that although he and the three Vision councillors voted against the shift during the Sullivan years, their party adopted the policy in the platform that Robertson ran on.
“That opposition was tested at the nomination for mayor and it was tested on the general public at election, and the mayor’s position was confirmed by the electorate,” Louie told the Straight. “The mayor is firm on that, and we are proceeding with that.”
Louie declined to restate the reasons why he previously opposed the shift. But like Deal, whom the Straight interviewed about the subject on November 22, Louie said that the tax redistribution is intended to keep small businesses viable and competitive.
Council votes on the budget on December 18.
Proposed cuts in city services in 2010
> Community services: $3 million
> Engineering: $5.3 million
> Fire and rescue: $2.7 million
> Vancouver public libraries: $1.4 million
> Parks and recreation: $2.8 million
> Police department: $2.6 million
> Corporate support services: $2.5 million
> Total service cuts: $20.3 million
Source: Staff report submitted for December 1, 2009, council meeting
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Comments
I'd read up on the latest stats at my local library, but I don't think they'll be able to buy the latest publications due to a $1.4 Million cut :(
Well I can think about it as I wander through my neighbourhood park, if the city doesn't cut the budget required to maintain safe walking paths.
If I may step off my high-horse for a moment, what will my corporate employer do if it fails to receive support services due to the $2.5 Million cut? Will I lose my job due to this lack of support? I hope not, for both horses are high, and the fall hurts no matter which one you're on.
Random thoughts from the riding ring.
And, as Peter Ladner suggested, there are $30,000,000 in outstanding fines and bylaw violations, so why not ask the province to stop renewing drivers licenses until all fines are paid, which would eliminate the entire budget gap?
There clearly are other options to cutting our parks, rec centres and libraries, which means these choices are deliberate and I'm terribly disappointed in the choices made.
People change their opinion, and certainly I applaud Monkton if he has done that. But I can't help but believe this is posturing. Monkton knows well that candidates he has supported in the past supported this shift -- Campbell, Green, Louie etc -- and he didn't criticize them.
Meanwhile, why do the businesses in Vancouver require further taxpayer subsidies? They benefit from generations of taxpayer monies, that have built bridges, transit systems, art galleries, parks etc that make downtown Vancouver the centre for the whole region. They have received literally billions of dollars in taxpayer subsidies. Why is the largest art gallery in the province in Vancouver and not in Maple Ridge or Surrey? Vancouver businesses have benefitted from taxpayer money and they should have to pay a much larger share of the tax burden than residents.
Let’s have a look at what we taxpayers have done so far to try to get to this “so called fair tax system.”
Small Business
The B.C. Government has cut small business taxes from 4.5 to 2.5 per cent – a 44 per cent reduction – for an estimated total savings of $401 million for small business over three years. This is the second lowest rate in Canada. The Province will reduce the small business corporate income tax rate from 2.5 to zero by April 1, 2012 obviously making it the lowest rate in Canada.
The small business tax threshold was increased from $200,000 to $500,000. Eligible small businesses pay this rate on the first $500,000 in income. When the rate goes to 0, small business will end up paying nothing on income of $500,000 or less.
Larger Corporations
Corporate tax reductions planned for the next three years will give B.C. a combined federal-provincial rate of 25 per cent, among the lowest corporate income tax rates of the world's major industrialized economies, 10 points lower than the U.S. federal rate by 2012.
B.C.'s corporate income tax rate is 11 per cent, the second-lowest tax rate in the country, with further reductions planned to 10 per cent by 2011. Since 2001, the general corporate income tax rate has been reduced by 33 per cent.
B.C. eliminated the corporation capital tax on non-financial corporations, and the tax will be phased out for financial institutions by 2010.
Federal corporate tax cuts just in this coming year will be $1.5B
Mother of all fair taxes the HST will save BC businesses 2 to $3 billion dollars as the costs are shifted to consumers
What have we achieved with these so called fair taxes?
Most of the gains of economic growth have gone to the richest 10%. Earnings for those in the middle have been stagnant for 30 long years, and workers at the bottom are losing ground compared to a generation ago. In after-tax terms the gap is at a 30-year high.
BC's minimum wage has not been raised for eight years and is the lowest rate in Canada.
Post secondary students will be paying more in tuition in 2011 ($1.11B) than corporations pay in taxes ($1.04B) with student debt at an all time high
BC has the highest child poverty rates in Canada for the 6th straight year
Only four in 10 men and three in 10 women are eligible for EI benefits (8 of 10 in 1990)
On and on, homelessness, youth unemployment rate, highest housing costs in Canada.
Thing is we can't just say you win, stop now. It keeps piling on. Now it’s the tax shift in Vancouver.
There is no case for and certainly no need for another tax shift from business to consumers.
We need to share this burden as we look for ways to spread the responsibility fairly, save services and save jobs. COPE does not support the shift and in fact believes that with a combination of additional savings (i.e. Managers positions being cut rather than just front line, stop forgiving parking ticket revenue, VANOC and province compensating city for lost revenue, city selling the approximate $200,000 in Olympic tickets etc.) and a slight increase above 2% (.5 to 1%) is justified. There is nothing sacred about 2%, it was number picked out of the air and one that can be and should be adjusted now that we see the impact of that scenario.
There you have it - we're COPE - we oppose the tax shift and we're the only ones.
It's great if COPE has changed it's ways as Mr Mass says above, however we need to be skeptical of these pronouncements given COPE's actions while it was in power. In April 2003, five COPE councillors on the then majority COPE council joined with two NPA councillors to shift the tax load from businesses to homeowners. COPE members voting for it included then Mayor Larry Campbell, and COPE Councillors Green, Stevenson, Louie and Bass. Of course, four of these five went on to form Vision Vancouver. Monkton was close with this faction. Those opposed included COPE councillors Louis, Woodsworth, Cadman and Roberts.
Vancouver labour unions, especially CUPE, five of whose locals donated $260,000 in total to Vision in the last municipal election cycle, need to review their support of Vision. CUPE paid around $1,250 for every job that Vision is about to cut! Now that's a bad investment.