Tank: Saskatoon again tackles toxic topic of property tax burden

Article content

Former mayor Charlie Clark’s opposition to a proposed change in the property tax ratio to shift the burden from businesses to residents helped him win the 2016 election.

Clark’s opponents, Kelley Moore and Don Atchison, supported the shift, which furnished the veteran councillor with a wedge issue and allowed him to position himself as a champion of residential property owners in his first campaign for mayor.

Article content

Clark vowed not to touch the ratio, which at the time meant that for every dollar paid in property tax by residents, businesses paid $1.75. That ratio still ranks as among the lowest in Canada or among the most favourable to business.

Yet during his first months in office in 2017, Clark did indeed vote to alter the property tax ratio to favour business. But that came in the wake of a big swing in the assessment value of Saskatoon businesses — a jump of nearly 17 per cent.

So Clark and council opted to adjust the tax ratio to rebalance the proportions paid by both residential and commercial property owners by adopting a ratio of $1.59 (commercial) to $1 (residential).

At the time, Clark expressed support for a shorter cycle for reassessing the value of properties for tax purposes, which is currently set at four years, the longest in Western Canada. The long stretch between valuations tends to produce big swings in property values.

The Saskatchewan Urban Municipalities Association commissioned a study last year that supported a shorter assessment cycle and a more recent base date (this year, it’s Jan. 1, 2023).

Article content

Article content

But the Saskatchewan Association of Rural Municipalities has opposed changes to modernize assessment. And you can easily guess which of these two associations gets the attention of the rural-based Saskatchewan Party government.

So once again this Looney Tunes assessment cycle resulted in big swings in property values, particularly in Saskatoon this year where residential property values rose by 13 per cent, while commercial values dipped two per cent.

In response, city hall administration is recommending another rebalancing act prompted by the province’s stubborn refusal to move into the 21st century on assessing property values. Perhaps one more reason the government elected just a single MLA in Regina and Saskatoon in October.

City bureaucrats have floated changing the ratio to $1.75 (commercial) to $1 (residential) to account for the shift in values. That would still leave Saskatoon with one of the lowest such ratios in Canada, lower than Winnipeg, but higher than Regina.

Prairie cities like Regina, Saskatoon and Winnipeg offer a more friendly tax environment for businesses to help attract investment.

Article content

Predictably, the Greater Saskatoon Chamber of Commerce strongly opposes the tax shift. And the business lobby group offers compelling arguments about the need to shield businesses in the current challenging environment. Also, higher taxes on businesses get passed along to the customers.

But the idea of shifting the tax burden from residents to businesses tends to be popular. That’s because people picture big multinational corporations when they think of business and perhaps not their favourite struggling restaurant, if it even survived the post-pandemic landscape.

However, in the current environment of an unprovoked trade war between Canada and the U.S., perhaps there’s a way to levy higher property taxes on American-owned businesses. It’s worth at least asking the question during these anxious times as it would certainly be popular, if not practical.

Regardless, the tax ratio tends to be a toxic topic. Some councillors and the chamber reacted like former councillor Mairin Loewen had committed sacrilege by raising the possibility of changing the ratio during the budget crisis of 2023.

Article content

And many residential property owners who sustained a greater burden eight years ago to lessen the burden for businesses will now want a reciprocal gesture since everyone is struggling with affordability.

If Saskatoon council chooses to adjust the tax ratio that will leave Regina with a far lower ratio — and looking like a more business friendly city — even though Saskatchewan’s capital is facing an 8.5 per cent property tax increase.

Regina experienced smaller swings in assessment values, but with such a big potential hike, you’d think every potential option will be considered, including tweaking the tax ratio.

Saskatoon chamber CEO Jason Aebig acknowledged the province’s assessment model is “broken” during a city council committee meeting Wednesday.

As someone who has donated hundreds of dollars to the Saskatchewan Party and who leads an organization that has donated thousands to the party, Aebig offers a voice the supposedly pro-business provincial government might actually hear.

Phil Tank is the digital opinion editor at the Saskatoon StarPhoenix.

[email protected]

twitter.com/thinktankSK

@thinktanksk.bsky.social

Our websites are your destination for up-to-the-minute Saskatchewan news, so make sure to bookmark thestarphoenix.com and leaderpost.com. For Regina Leader-Post newsletters click here; for Saskatoon StarPhoenix newsletters click here

Article content