September 17Th, 2013 Dr. Stanley Hamilton Chair, Property Tax Policy
Total Page:16
File Type:pdf, Size:1020Kb
September 17th, 2013 MEMBERS Alberta Investment Management Corporation Dr. Stanley Hamilton Allied Properties REIT Chair, Property Tax Policy Review Commission Artis REIT Aspen Properties Ltd. City of Vancouver Avison Young 453 W. 12th Ave Baybridge Seniors Housing Inc. bcIMC Vancouver, BC V5Y 1V4 Bentall Kennedy Group BMO Capital Markets Real Estate Inc. Boardwalk REIT Sent via email to [email protected] Brookfield Financial Real Estate Group Brookfield Office Properties Brookfield Real Estate Opportunity Fund Re: City of Vancouver Property Tax Ratios Build Toronto Inc. Cadillac Fairview Corporation Ltd., The Calloway REIT Canderel REALpac and Altus Group release an annual Canada-wide survey of property tax rates of CAPREIT CBTE Limited major urban centres. REALpac utilizes the results for the eight Canadian municipalities CIBC World Markets Inc. that have been analyzed to promote tax fairness as well as recognize those cities which Colliers International. Inc. Cominar REIT maintain equitable rates. The commercial property class generally and office space CREIT (Canadian REIT) specifically are major net contributors to the city that houses them, and high property Crombie REIT Cushman & Wakefield Ltd. taxes a major reason why tenants will choose to relocate from downtown cores to Dorsay Development Corp. suburban municipalities. Dundee REIT EPIC Realty Partners Inc. Fengate Capital Management Ltd. Fiera Properties The recently published 2013 survey yielded both encouraging and alarming results. At the First Capital Realty Inc. high end of the spectrum, Vancouver, Toronto, and Montreal continue to post the highest Gazit-Globe GE Capital Real Estate commercial to residential tax ratios peaking as high as 4.4. While REALpac remains Granite Real Estate concerned about these high ratios, it was pleased to see the overall average ratio trending Greystone Managed Investments Inc. Grosvenor Americas Limited downward. REALpac applauds those municipal councils which have contributed to this GWL Realty Advisors Inc. H & R REIT trending and for working towards a more favourable business environment. Hines Canada Unfortunately the strident progress achieved in Vancouver since Council adopted the Homestead Land Holdings Limited IGRI Inc. recommendations of the PTPRC in 2008 is now reversing with the actual ratio increasing Infrastructure Ontario from 4.32 to 4.35 in 2013. REALpac also recognizes and commends the cities of Winnipeg Ivanhoe Cambridge Killam Properties Inc. and Edmonton which continue to promote favourable business environments with the M3 Capital Partners two lowest commercial to residential tax ratios amongst major Canadian municipalities at Macquarie Capital Markets Canada, Ltd. Manulife Financial 1.99 and 2.33 respectively and the City of Toronto which has mandated a target ratio of MCAN Mortgage Corporation Melcor Developments Ltd. approximately 2.50 by 2020. Menkes Development Ltd. Milestone Apartments REIT Minto Group, The On an absolute tax basis Vancouver and Edmonton populate the low end of the spectrum Morguard Corporation with the lowest estimated property taxes per $1,000 of commercial assessment while Morguard Investments Limited Morguard REIT Toronto, Ottawa, Halifax and Montreal have the highest. From a residential assessment Mortgage Fund Three Northern Property REIT standpoint, Vancouver, Calgary, and Edmonton yield the lowest property taxes per $1,000 NorthWest Healthcare Properties REIT of residential assessment while Winnipeg, Halifax, and Ottawa yield the highest. REALpac OPTrust Oxford Properties Group Inc. is committed to working with municipalities across Canada on achieving tax fairness. The Parkbridge Lifestyle Communities Inc.. continued reduction of excessive property tax burdens on commercial and industrial Partners REIT PIRET tenants and landlords will make cities more competitive and promote jobs and Plazacorp Retail Properties Limited. investment, resulting in increases to the property assessment base and subsequently Primaris Retail REIT Public Storage Canadian Properties generating more stable and sustainable revenue. Raymond James Ltd. RBC Capital Markets Real Estate Group Realstar REALpac believes cities should work towards a commercial-to-residential ratio that more Retrocom Mid-Market REIT RioCan REIT fairly reflects the share of municipal services consumed by the commercial and residential Scotia Capital Inc. sectors and the best way to do so is through gradual reductions in the commercial rate. Scotiabank Standard Life Investments (Real Estate) REALpac would like to remind the committee that the business sector continues to pay Inc. approximately $2.42 for each $1.00 of benefit received while the residential sector pays Sun Life Assurance Company of Canada TD Securities Inc. $0.56 for each $1.00 of benefit. Timbercreek Asset Management Inc. Trimaven Capital Advisors Inc. Triovest Realty Advisors High urban commercial property taxes: Send jobs and development out of city centres and contribute to urban sprawl; Work at cross purposes with hub-and-spoke transit, who bring people to and from downtown cores; Penalize investment in downtown office, hotel, apartment and retail, particularly during periods of high vacancy; Punish small and medium size businesses who are tenants (usually under "net leases") of downtown offices, or drive them out to the suburbs; and Disincent major international tenants from locating in those particular cities. REALpac recommends the City of Vancouver work towards a reduction in their commercial property tax rate. Provinces and municipalities alike have shared interests in the economic vitality of major urban centres, and it would be prudent to ensure this vitality is achieved. Vancouver is at risk of becoming an unfavourable place for businesses to locate as commercial rates rise steadily, causing them to look to other cities where the tax environment is more palatable. If Vancouver seeks to remain an important regional location for doing business, it is important for the municipal government to do all it can in attracting and keeping these tenants through favourable tax policies. The recommendations made in this submission represent what REALpac believes to be significant ways for the City of Vancouver to move forward economically. If you have any questions regarding the recommendations outlined in this submission, please contact me at [email protected] or (416) 642-2700 x223. Based on the schedule set out in the City of Vancouver Administrative Report of April 17, 2013 we would welcome the opportunity to review the interim recommendations of the PTPRC before they are presented to Council in October 2013. Regards, Carolyn Lane VP, Membership, Marketing & Communications .