Was It All Just a Cruel Hoax?
The business education tax (BET), a heavy property tax which all of us are paying either directly or indirectly, was imposed at different rates in different municipalities.Prior to 2007, it was a far heavier tax in Toronto than in the surrounding municipalities.It was making it more difficult for Toronto businesses to compete against businesses in Mississauga, Pickering, Markham etc, where the rates were much lower.
The 2007 budget introduced a program to equalize the BET across the entire province gradually until in 2014 all commercial property would be paying the same rate of 1.6%. Benefits to Toronto commercial property were to be nominal in the first years, providing significant relief only in the last few years.When would Toronto start to see some benefit from it, 2012-2013.
The 2012 Budget froze the BET rates as at 2013 until a balanced budget is reached, projected to be 2017-18.To make matters worse, the government continues to accord new projects the 1.6% rate, thereby giving new enterprises a distinct competitive benefit over incumbent businesses. The government says the freeze will produce fiscal savings of over $300 million annually.So this freeze will produce big savings for the government by taking the money right out of the hands of Toronto businesses, much of which consists of small and family-operated shops and stores.
The Liberal government introduced the program with great fanfare and got great mileage out of it, announcing how it would save businesses hundreds of millions of dollars.Then when the tax savings are poised to kick in, the program is frozen. Was it all just a cruel hoax?