Toronto City Council voted last week to cap property tax increases at 10 per cent per year for small businesses in the city. The decision comes on the heels of months of dissonance from small businesses on Yonge Street outraged over a sudden increase of over 100 per cent in their property taxes in what has been called the ‘Yonge Street Tax Revolt.’
The bill is only an interim step toward greater tax reform, and Toronto Mayor John Tory said at the City Council meeting that he hopes the province will take steps to fix the Municipal Property Assessment Corporation’s system, which he called “broken.”
The bill includes an amendment, tabled by Councilor Kristyn Wong-Tam, that ensures that the process of exploring other tax policy options for the coming years will include community consultation. Wong-Tam’s amendment also stipulates that the deadline for a report is set at July 17, 2018.
Since last summer, many businesses on Yonge could be seen with posters in their shop windows with messages such as “Stop Mayor Tory’s Sudden 100% Tax Increase!” and “Yonge Street Tax Revolt.”
A number of small businesses spoke at the Executive Committee meeting on January 24, which debated the bill before it went to City Council. While some were in favour of the property tax cap, others stated that it wasn’t enough to save their businesses.
Linda Malone, owner of Iam Yoga, said at the meeting, “As a small business owner and U of T graduate, I have put my savings, blood, sweat, tears, energy, and a lot of calculated and strategic thought into successfully growing a business that contributes to both the municipal economy and the cultural fabric of my community.”
“Increasing property taxes at the rates initially approved this year will put my 10 year-old small business out of business.”
While Malone supported the 10 per cent cap, Mark Citron, owner of Cat’s Cradle, which is closing, said that it’s not enough.
Cat’s Cradle has been in Citron’s family for 98 years, but for the past 10 years they have failed to turn a profit. “Just saying that [if] you’re going to be happy with 10 per cent, [then] my business is going out of business,” he said at the meeting.
In addition to the personal financial impact, some business owners also raised the issue that making rent too expensive for small businesses on Yonge would damage the culture of Toronto’s shopping district.
“This is as much about the health and survival of many of Toronto’s traditionally most beloved and visited neighbourhoods, as it is about people like myself, and my staff, and our survival,” said Dominic Cramer, owner of the Toronto Hemp Company.
“Huge, uncontrolled property tax increases caused by rampant real estate speculation threatens to, at least temporarily, destroy these areas and cause them to be virtual ghost towns while the condominiums develop all around us,” said Cramer.
George Giaouris, owner of Northbound Leather, labelled today’s conditions as a “perfect storm” of unfair taxation, decreased foot traffic, and minimum wage increases.
Tory said he hopes that “we don’t look at today as a conclusion but rather as a beginning. It’s a beginning that provides shorter term relief and certainty for people.” At the same time, the mayor said that the bill has to be accompanied by a will from City Council to pursue other tax options and a change to provincial policy.