If the recent commercial tax reform report from the city’s financial staff had been given an unofficial title, it would have been “Commercial Tax Reform: It’s Too Hard To Do”. The report, after much useful analysis, produced two simple recommendations. Neither of the recommendations would have accomplished much for businesses who feel stifled by their municipal tax burden, or help the city achieve the goals set out in its Regional Plan or Economic Strategy.
During the presentation city staff gave to Council about the report, Bruce Fisher, Halifax’s manager of fiscal and tax policy and the author of the report, warned Council that “there is no silver bullet to commercial tax reform.” Certainly this is true, and in fairness to city staff, they had been asked to produce new tax policies but were given no clear direction as to what the city needed to achieve from them.
I am pleased to relay that Council had a good discussion about commercial taxes in response to the report. It would have been easiest for Councilors to shove this difficult issue under the carpet for a couple of years by accepting the report’s recommendations and declaring the job done. However, fueled by a lot of advocacy from the city’s business improvement districts (BIDs), including Downtown Halifax, that did not happen.
What happened instead is that Council, in essence, agreed that what we need is a tax structure and system that helps to achieve the already-Council-approved Regional Plan and Economic Strategy, the guiding documents that hold the vision for where we want our city to go. They acknowledged that currently the city has very limited power in terms of changing tax policy, which instead lies with the Provincial government and resides in the Halifax Charter.
Recognizing this, Council instructed the Mayor to write to the Municipal Affairs Minister to request a Charter amendment that will allow the city a great deal of latitude to institute the sort of tax system that makes the most sense for Halifax and our businesses. Granted this power, the city could then structure tax policy that directly supports the Regional Plan and Economic Strategy, both of which emphasize the importance of a vibrant downtown core.
Tax policy moves slowly. There is no quick fix for the downtown business who feels too burdened with tax as a percentage of their monthly rent or for the property owner whose assessments have doubled due to real estate sales within their neighbourhood.
That said, the direction that Council gave on Tuesday was the right step. From a long-term perspective we need plans that inform tax policies and the ability to act on them.
The road to meaningful commercial tax reform is a long and winding one. This week we achieved a milestone worthy of note, and Downtown Halifax Business Commission will continue to advocate for tax improvements and investments that will help downtown prosper as the city’s economic heart.
Downtown Halifax Business Commission