Do you think Airdrie should have a business tax?
Tuesday, Oct 10, 2017 06:00 am
For many years, Airdrie businesses have benefited from not paying a business tax. As the city has grown, the tax burden has largely been placed on the residents and I believe it is time to share that responsibility with the business community. It is time to start working towards a more balanced resident/business ratio. When we talk about Airdrieís business tax we should be cognizant of the home-based businesses in Airdrie, which make up 60.28 per cent of all business licences issued in 2016. These businesses are the fabric of Airdrie and allow entrepreneurs to build their companies. That being said, I believe in a tiered business tax system where all commercial and industrial businesses that employ 20-plus full-time/part-time employees would be required to pay a business tax as well as a home-based business that employs 10-plus full-time/part-time employees. This tiered system would see the home-based businesses of 10-plus employees pay up to half of what the commercial and industrial businesses would be required to pay, depending on their business type.
Being a business banker, I see, on a regular basis, how the no business tax brings new business to Airdrie. I understand the negative and positive impacts of many things that affect our local businesses. I will say, in my opinion, starting to charge a business tax in a time that businesses are dealing with increased minimum wage, potential federal tax changes and an economy that is only just on the rebound would not be a wise choice. Businesses that come here or start here bring a positive ripple effect to our community; bringing jobs, new places for people to enjoy locally, such as shopping and dining. Airdrie is unique and our business community and culture is unique, supportive and generous. They time-after-time support the causes that are important to their staff and their community. I think we would be surprised at what the dollars add up to back into our economy and community well-being. It is not legislated or required by taxes but done so out of a true point of caring about where their business operates.
The economy is still in a fragile state and with changes to minimum wage and new taxes added by the federal and provincial government, businesses are already struggling. One of the main reasons Airdrie attracts business is because we have no business tax. Implementing yet another tax will destroy some of our smaller businesses. We have to remember a lot of business owners are also citizens of Airdrie and we don't want to place more strain on them or their livelihood. The municipal government has a decent reserve. We still have many vacancies because of high rental rates; letís try and attract even more business. I think at this time we should leave business tax as it is and promote shopping locally.
Mike De Bokx
On one hand, I believe we have to look at any/all options that would lead to increasing the city's revenues. On the other hand, we should do whatever we can to entice new and existing companies to set up shop in Airdrie. Far more research and analysis on the economic impact a business tax would incur is required before anyone can make a definitive decision on yes or no to a business tax.
I am a candidate for the population. I am not in favour of a business tax. If there is one, people will have to pay for things and service at a higher price.
If the city did choose to implement a tax, one way this could be viable is by lowering the property taxes for the businesses to ensure the tax bracket remains competitive.
Airdrie is a vibrant community where consumer choice is valued. To provide choice, you need to attract and encourage as many businesses as possible. Not charging a business tax results in a direct savings to the bottom line of the business. Many of our small businesses have started out as home-based, and as their customer base grew, moved into storefront facilities. When this happens, the business will have to contribute to the tax roll by paying property tax. Businesses also contribute by providing employment and supporting many non-profit groups through donations. This is evident from the new and creative businesses out there. Some business people have said square footage rates can be a challenge in locating and renting space. We need to encourage businesses to take the risk. A business tax will only hinder the entrepreneurial spirit and fail to provide that choice in Airdrie. While there are signs the Alberta economy is on the rebound, consumers are still guarded with their spending habits. I would hate to see a local business close shop before they have truly tested the market and achieved success.
I don't believe Airdrie needs a business tax. Commercial property is already taxed significantly higher than residential property and our business community is very generous in terms of donations and support of local not-for-profits and community events. My fear would be that additional taxation might limit their ability to exercise that generosity as well as limit future business investment in our city. We need to attract more business to Airdrie, not hinder those that have already invested here. With increased wages and significant tax increases already imposed on the business community from our provincial government, as well as the impending federal increases about to be imposed on the small corporate business sector, our business community is already struggling. I'd like to see us pursue some technology and healthcare businesses. If the future is in tech and health services, then we should be courting those types of businesses so as to secure a sustainable future. More businesses will automatically contribute more property taxes at the existing higher commercial taxation rate.
The fact Airdrie does not have a business tax makes it more attractive to potential investors and business innovation. I feel capturing tax through assessment values hits our businesses hard enough. With new provincial minimum wage increases and federal taxation changes, many small businesses are already facing possible financial stress. It would not serve as incentive for brick and mortar businesses to open in Airdrie and contribute to our local job market and economy. It would be more beneficial to our residents to look at innovative ways to attract and retain business. By pursuing new vibrant business and industry, we would have a healthier assessment split. With a healthy split, Airdrie could potentially see a stable mill rate spread out over more residential and commercial/industrial properties. When our community has strong economic growth, taxpayers are not left with large increases year over year. By not considering this tax, we can also open the door for existing business to consider/afford more capital investments and expansions that could potentially increase employment opportunities within the city.
The city has a solid financial position with surpluses projected into the future so the question I have for anyone proposing a business tax is, how would the money be spent? There must be a very specific need for any tax increase, coupled with an objective standard to measure the results for dollars spent. I do not share the view that greater public spending always equals greater public good; that we care about an issue simply by throwing money at it without considering the revenue source. People already face a heavy tax burden and businesses are not a bottomless well of money to tap for funding. This issue is important considering the federal Liberal's plan to increase business tax revenue. It relates directly to Airdrie for those of us who want to see a diverse array of businesses to help establish an identity. If we want to compete with Calgary, we need to maintain our competitive edge. I believe by adopting a governance model which places value on every dollar by measuring the results achieved by programs, not simply using dollars spent as a scorecard to show support for a cause, we would find there is enough money to fund all those things we care about as a city and as Canadians.
I believe while Airdrie is trying to grow and attract unique businesses to the city, keeping a no business tax policy is a good idea. This policy would benefit our business owners in Airdrie, should the federal government choose to move forward with the proposed changes to the corporate tax laws. This also creates incentives for businesses to come and bring their products, services, attractions and, above all, new jobs. By creating a better industrial/ residential ratio within our city, we can also generate more money through levies to offset residential taxes. This could mean keeping our taxes low and still increasing our services and quality of life for everyone.
In a word, no. Airdrie has prided itself in this approach to attracting business and has leveraged this selling point to do so; to go back on that now is going back on our deal with our current businesses.
As a city, we need to foster our economic growth with trusting relationships. Enticing business, big and small, to set up shop with our advantage programs and then breaking that deal only serves to erode the potential for future relationships with others who would have considered making Airdrie their business home. Trust is the true key to all good partnerships.
Question was sent to all candidates for whom the Airdrie City View has contact information, however, not all responded by press time.