Ottawa business property taxes exceed national average: Altus Group

Ottawa

Despite trending downwards over the past decade, Ottawa’s commercial property tax rates remain among the highest in Canada, a recent report says.

In its Canadian Property Tax Rate Benchmark Report, real estate services firm Altus Group calculated that businesses in Ottawa pay $28.52 in property taxes per $1,000 of a property’s assessed value. That’s down 0.4 per cent from last year.

That’s the third-highest among 10 major Canadian cities, behind Montreal ($37.23) and Halifax ($33.18). The national average, according to Altus, is $23.02.

“A city’s property tax rate is directly linked to its competitiveness,” said Michael Brooks, chief executive of REALPAC – a national industry association for owners and managers of investment real estate – in a statement.

“High commercial property tax rates send business and economic development elsewhere, and work at cross purposes with infrastructure investments, particularly transit. Further efforts should be made in all cities to bring commercial property taxes down to more reasonable levels,” Mr. Brooks added.

The Altus report also compared commercial property tax rates to residential rates. In Ottawa, the rate is 2.67. This means a commercial property valued at $1 million would incur
property taxes 2.67 times higher than an equally valued residential property.

That’s slightly below the national average of 2.85.

Altus argues that the ratio matters because it illustrates the relative tax burden on businesses and residents.

“High commercial property taxes place a greater weight on businesses to contribute an unequitable share of municipal budgets,” Altus, which sells commercial real estate services, said in its report. “While every homeowner would appreciate paying less property tax, it is important to balance the burden paid by businesses in each city. Lower commercial property taxes help make cities more competitive, promote job growth and investment, and subsequently generate more stable and sustainable revenue.”