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Business owners feel strained amid proposed Toronto property tax increases


Megan Munro is grappling how her family is going to handle Toronto’s property tax increase with three young daughters at home.

"Just really disappointed and shocked," she told CTV News Toronto in an interview. "I mean it's yet again another increase for families."

She and her husband are also both small business owners. Munro runs a gift store called Caribou Gifts in the Junction and will be impacted by the commercial property tax increase as well.

"We're feeling it from all angles," said Munro.

Mayor John Tory released his proposed budget on Tuesday, which included a 5.5 per cent residential property tax hike. That doesn't include the already approved 1.5 per cent increase in the city building levy, making the total increase seven per cent. The commercial property tax increase in the draft budget is 2.75 percent.

"The principal priority I had was to reserve frontline services," said Tory. "What they don't read about is cuts in frontline services because we preserve them."

Munro said the timing is terrible, with inflation causing prices to spike for everything from gas to groceries.

"Our grocery bill has gone up, it's got to be 25 per cent or more," she said. "We know our customers are feeling the inflation and all these increases, which is of course affecting their spending in our store. We're getting hit at home and at work now."

"I think that we're not going to see a whole lot of consumer confidence for a while," said Alison Kemper, associate professor with the Ted Rogers School of Management.

In an interview with CTV News Toronto she explained there's a whole host of impacts at global, provincial and municipal scales impacting supply chains and spending left over from the measures taken during the pandemic.

"For the last 20 or 30 years, the provincial government has taken on more responsibility for costs that don't vary so much year to year, whereas the city has to deal with very volatile costs and doesn't have a lot of new ways of generating revenues to match those costs," Kemper said.

"That means that taxpayers, who are almost all residential ratepayers and business ratepayers are having to deal with the failures of higher level some governments to provide adequate housing for instance."

Property tax is based on the assessed value of a home and not the market value, explained Toronto real estate agent Steve Jelenic. He suggested the reason why this might be happening now is because of a drop in housing sales.

"Toronto is the only city in Ontario that has a municipal land transfer tax and a provincial land transfer tax," he said, "so the city is losing out on millions in revenue generated when the number of properties bought and sold falls significantly."

City councillors and experts also point to the fact that property taxes have been kept artificially low throughout Tory's tenure, so it's about time there's a significant increase.

"Toronto actually has the lowest percentage tax rate on the assessed value out of any city in Ontario," said Jelenic, adding the assessed value is usually about 60 percent of the true market value.

But Jelenic said that, "any tax hike is not welcome news by residents especially when inflations high, interest rates have gone up."

What adds insult to injury for Munro is that the holiday season, typically seen as the make-or-break time of year for retail businesses, was not what she had hoped.

"I have never seen so many small businesses closing as I've seen lately," said Munro. "So many retail stores deciding to shut their doors after a poor holiday season."

Megan Munro, a mother of three, is seen with her family in this undated photograph provided to CTV News Toronto.

Kemper said it's a really hard time to be a business person with a retail operation in an Ontario municipality, adding that "the unbelievably leveraged tax rates on businesses in Ontario municipalities are, are quite threatening to the viability of small businesses."

Munro said her store made it through the holiday season alright, but she was back at work when her youngest was just two weeks old to make sure the holiday season went smoothly.

"I think it's going to be very challenging for most of the families in the city to manage all of these changes all at once." Top Stories

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