The most visible impact local governments have on their business community is through the property tax system. Apparent fairness of the tax system, therefore, is one of the most important criteria that business owners use to rate the performance of their municipal government. Fairness reflects the level of taxes applied and the distribution of taxes among different properties. The survey results bear out these concerns. The remaining 6.8 per cent had no response.
Business owners consider that municipalities are dangerously over reliant on property taxes.
The rate of taxation on business properties is, on average, twice as high as the tax rate on residential properties. In many major cities such as Toronto, the distortions are even higher. Both the local and provincial levels of government are to blame for this inequity. Rather than insulating residential ratepayers, the practice of loading additional taxes on business exposes residents to far more damaging effects. Job losses, sluggish wages and general economic stagnation invariably accompany attempts to collect high levels of taxes without regard to ability to pay, or profitability.