Ontario's Business Education Tax - the most unfair tax in Canada - needs immediate reform says new report
- For no added benefit or service, Ontario's Business Education Tax (BET) costs many Ontario businesses thousands of dollars more per year than their competitors, even discriminating among neighbouring businesses with the same assessment.
- Some Ontario businesses are paying up to $5,200 more per $1M in assessment, the report says, and $2,300 more than they would if cuts promised in 2007 by the Ontario government had been implemented.
- In 2007, the Ontario government set a lower BET rate (1.6%) for buildings on which construction started after budget day that year (March 22). For pre-2007 buildings, rates vary widely from one municipality to another, creating even greater inequity.
- The government promised businesses in already existing buildings that 1.6% would be their ceiling rate by 2014.
- In 2012, however, the government changed its mind: higher BET rates would continue penalizing older buildings and reductions would cease until sometime after 2018, when the provincial deficit is eliminated.
- While eliminating the deficit is clearly a priority, a new report finds that meeting the government's original commitment on time - in 2014 - would only delay balancing the budget by five weeks.
- The premier and finance minister who put equity on hold in 2012 have resigned. A new premier and finance minister have an opportunity to honour the original commitment.
- Once the original commitment is met, BET rates will finally be uniform within each municipality, but still not uniform from one municipality to another. There is no added benefit to businesses in municipalities with higher rates. Further BET reductions beyond 2014 will be needed to make the BET an equitable tax Ontario-wide.
"It's time for the government to come through for main street businesses across the province. The government itself has proposed the right solution and the right principles, as the report shows, but so far they've failed to deliver:" says John Kiru, Executive Director of TABIA.
ABOUT TABIA AND OBIAA
OBIAA and TABIA are non-profit umbrella organizations representing more than 55,000 businesses and property owners in Ontario's 280 BIAs. The organizations engage in advocacy initiatives that create business environments where main street businesses can thrive.
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|REPORT“Ontario’s Business Education Tax: Analysis of Policy Options”
Adam Found and Peter Tomlinson
Department of Economics, University of Toronto