Ottawa residents could soon have their say on a proposal to give small businesses a permanent 10 per cent tax break.
The city’s finance and economic development committee Friday approved a staff recommendation to seek residents’ input on a proposal that would see City Hall create a new small-business property tax subclass. The change would effectively cut property taxes by 10 per cent at about 4,700 commercial properties housing nearly 8,000 small businesses in Ottawa.
The new rules would translate into an annual discount of about $1,000 for a business property assessed at $600,000 that currently pays about $15,000 a year in municipal and education taxes. The savings could rise by an additional $500 if the province agrees to match the education tax discount.
To offset the discount, big-box stores such as Costco and Walmart as well as other larger commercial and industrial properties would see their taxes rise by about 0.68 per cent. The city says that would mean a commercial property assessed at $4 million that now pays $102,000 in municipal and education taxes would shell out an additional $700 a year.
The proposal comes after the province announced in its 2020 budget last fall that municipal governments would be permitted to reduce property taxes for small businesses should they choose to do so.
Under the plan, property owners would be required to pass savings on to tenants or their discount would be revoked. Eligible properties would include most small offices, hotels, mainstreet retail spaces, restaurants, bars, daycares and sports clubs as well as commercial and industrial condos and shopping centres under 15,000 square feet.
City council will vote on the committee’s recommendation at its next meeting on Wednesday. If it’s approved, staff would conduct public consultations and present a report to council before the end of September.