Local merchants tremble before tax increase

By Katie Lewis

Tax hikes have been on the minds of Centretown’s business community for more than a year, and their worst fears were confirmed earlier this month with a lifting of a provincial tax cap for businesses.

“They get us every time we turn around,” says Lori Mellor, executive director of the Preston Street Business Improvement Area (BIA).

“There’s got to be another solution.”

Ontario Finance Minister Greg Sorbara’s changes to the 2004 property tax assessment rules allow Ottawa’s city council to decide how much of the $23-million tax burden will be shouldered by businesses and how much by homeowners.

Jean Martin, owner of Images on Bank, is upset by the news of the possible property tax hike. He’s been in business for 15 years.

“For this small property, the taxes we pay are ridiculous,” says Martin.

“They’re extremely high for a 1000-square-foot store. We pay close to $1700 a year.”

Martin says he feels the property tax increase will hurt prospective businesses in the area too.

“It will discourage new stores from coming in,” he says. “It makes it really hard when you’ve got your rent, and your property taxes come close to what your rent might be.”

The provincial Tories placed a five per cent “hard cap” in 1999, which effectively froze business taxes.

The new policy introduced by the provincial Liberals changes this to a “soft cap,” which allows the city to increase business taxes by half the residential rate.

Mellor says the property tax increase is “just not fair.”

“Because business owners don’t have a municipal vote this continues to happen,” she says. “They’re (city council) just making it impossible.”

Martin says he’d rather see the tax increase hit homeowners than businesses, even though he fits into both categories.

“So my taxes go up six to 16 per cent on my house. That’s not going to be ridiculous — It’ll be like $200 to $300 a year,” he says.

“Put 10 per cent on this business and that’s going to be a lot . . . that’s an extra $150 a month.”

“It’s very frustrating,” he adds. “It makes it hard for a lot of businesses to survive.”

Other businesses in Centretown, however, aren’t as worried.

“I don’t pay property taxes,” says Dave Rimmer, who runs the store After Stonewall.

“The owner of the building pays that sort of thing.”

Rimmer says he doesn’t think his rent will increase.

“I just got a five-year lease signed,” he says. “I don’t pay any attention to that.”

Marc Theriault, who runs Maison Baguettes, agrees the property tax increases probably won’t directly affect him.

“It’s all included in our common fees,” he says. “It won’t matter because our common fees are set.”

But Martin says even renters will have to pay for the property tax increase, whether they realize it or not.

“For many people, their taxes are built into their rent,” he says. “But it’s still always there. The landlord will pass it down.”

Mellor says business owners will probably mobilize to fight the increase.

“We can’t face large tax increases,” says Mellor. “There is going to be a tax revolt.”

Martin says he agrees with the idea of withholding tax payments as a means to protest the increase.

The problem, he says, is that Ottawa business owners are complacent.

“We just don’t do anything about it. We [businesses] just go with whatever is handed down to us,” he says.

Diane Holmes, councillor for Somerset Ward, could not be reached for comment on the issue.

Martin says he’s frustrated that even with the increase in property taxes, small businesses in the area will not see an increase in services.

He says the level of service has been poor for the last several years.

He says it’s an unfair choice between a tax freeze with poor services and a tax increase with the same poor services.

“I think our services are not that good as it is — our sidewalks are often dirty, it doesn’t look clean around here,” says Martin.

But despite struggles like these, Marting says he’s lucky to have a fairly stable business.

“You just get handed these things and you somehow make it work,” says Martin.

“But not everyone can do that.”