Municipal property tax report highlights unintended consequences of increasing burden on small businesses
Winnipeg, September 25, 2024 – A new report from The Canadian Federation of Independent Business (CFIB) is urging municipalities to consider the growing pressure that rising property taxes are placing on Manitoba small businesses.
Research showed that nearly 60% of Manitoba small businesses have had to raise prices to cope with property tax increases, while over half (55%) had to delay their expansion plans. In addition, 40% of small business owners are indicating their ability to pay themselves is compromised as a result of rising property taxes.
“Small businesses are vital to Manitoba’s communities, and fair and affordable property taxation policies are crucial to supporting their success. Over half of Manitoba businesses identified property taxes as one of their most harmful costs, which is why we encourage municipalities to keep this in mind as they navigate budget decisions”, said Tyler Slobogian, Senior Policy Analyst at CFIB.
The report shows that Winnipeg and Thompson have maintained a balanced and fair property tax burden between commercial and residential properties. This approach ensures that businesses are not overburdened by property taxes compared to homeowners. However, CFIB’s report cautions that any potential shifts that increase the share of taxes paid by commercial properties could tip the scales unfavorably for small businesses. A 1% annual shift over five years in Winnipeg and Brandon, for example, could result in over $11,000 and over $7,000, respectively, in additional property taxes for a business, hindering their ability to grow and create jobs.
"Municipalities should look to internal efficiencies, as Winnipeg has already demonstrated with its recent decision to cover its budget deficit through reductions in discretionary spending, a hiring pause, and deferrals", said Slobogian. "Sustainable municipal spending is key to ensure that property taxes remain stable, predictable, and affordable".
CFIB recommends several key steps to ensure a fair and affordable property tax structure:
- Reduce municipal operational costs by finding internal efficiencies. Lower costs would reduce the need for higher property tax revenue, which often disproportionately affects small businesses.
- Avoid increasing the share of property tax revenue paid by commercial properties. Municipalities with higher tax fairness ratios should work to reduce the share paid by commercial properties.
- Limit operational spending increases to match inflation and population growth, ensuring that small businesses are not overwhelmed by excessive tax hikes driven by rising government costs.
- Introduce property tax relief programs that would mitigate the negative unintended consequences of rising property taxes on small businesses.
- Increase transparency by publishing accessible municipal taxation information, consistent with practices in other western provinces. The lack of data in Manitoba is a significant concern for our members and all Manitobans who seek access to public information. Accessible tax information is crucial to inform taxpayers on how much tax revenue is collected and allocated.
Read the full report here.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region, including over 4,000 members in Manitoba. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
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