The study, released by the Nova Scotia Chambers of Commerce, cites experts in economics and municipal governance in concluding that the system is a barrier to economic growth and is unfair to all property taxpayers.
[HALIFAX, NS] — The Nova Scotia Chambers of Commerce — the umbrella body for all 31 local chambers and their 7,000 business owners in the province — has released a study that casts a shadow on the municipal property tax system.
The study cites experts in economics and municipal governance in concluding that the property tax system is the most regressive form of tax in the country, is a barrier to economic growth, is unfair to all property taxpayers and will create more problems for seniors in the future.
The Chair of the NS Chamber of Commerce, Chris Atwood, said that “This study is a follow-up of our earlier report in February of this year and not only validates that work but reveals some huge gaps in fairness to all municipal taxpayers, especially business property owners”.
On February 1, the NS Chamber released a report on all commercial tax rates across the province which indicated that the business sector bears a significantly higher burden by an average multiple of 234 per cent more in business taxation for every dollar of the residential sector for an equal amount of assessed property value.
The NS Chamber partnered with Collins Barrow, a national accounting firm to ensure accuracy and validity of the report. NS Chamber Executive Director Wayne Fiander said that "we wanted to make sure that our data and conclusions were well-founded."
The NS Chamber has four recommendations for all levels of government:
1) Until substantive changes are made, the Province of Nova Scotia should legislate a cap on the multiple between commercial and residential rates, at the rate used in the province of New Brunswick — that being 150 per cent or 1.5 times the residential rate.
2) That the Province of Nova Scotia should eliminate the cap on residential assessment.
3) That each municipal government should, within its borders, charge the same rates for the same service for all consumers.
4) That property assessment as a measure of cost recovery for municipal units be eliminated and that the province of Nova Scotia seriously investigate the use of either the HST system or income tax or a flat tax or some combination of all three as a means to eliminate property taxes over a ten year period in order to meet the characteristics of a good tax. This will also serve to produce savings by not valuing property any longer and lower costs of administration in collecting taxes.
Fiander explained that municipal governments are forced to rely on an out-of-date tax regime. He said that "If provincial and municipal policy makers want to grow the economy, then, a fundamental change in the municipal cost recovery system has to take place and the sooner the better".
"As a business organization, the Nova Scotia Chamber of Commerce wants to not only point areas of concern but to offer constructive ideas on how to improve where we work, live, raise a family and grow our business," Atwood said.