The mention of tax relief is music to the ears of any business owner, even at the best of times. But, the provision of tax relief to small businesses in Toronto would provide a whole lot more than just music.
On October 20th Mayor John Tory announced that a City of Toronto Staff report would be released to Toronto’s Executive Committee, recommending the creation of a tax subclass to provide small businesses with tax relief.
These recent announcements highlight that the governing body of Toronto is acutely aware of the prolonged effects of the pandemic on Toronto’s businesses & main streets. But most importantly, that they’ve been planning to do something about it.
Earlier in 2021, at the direction of the City Council, City Staff were instructed to “define and develop” a small business tax subclass and publish their developments in a report to Toronto’s Executive Committee. The findings of the City Staff intended to “address the preservation and re-building of Toronto’s main streets” via the offering of tax reductions to a wide range of small businesses and enterprises city-wide across Toronto.
The report, recently announced by Mayor Tory, concluded in its recommendation of a 15% tax reduction for small businesses within the commercial tax class.
To fund this tax relief, organizations within the commercial tax class that did not meet the requirements of the newly created subclass would experience a tax increase of 0.85%. This increase would be seen specifically within their municipal portion of property taxes.
The City of Toronto announced, via their website, that they estimate approximately 25,000 small businesses or 60% of all commercial properties across Toronto would benefit from the suggested tax relief.
The city council also published eligibility requirements for the new suggested tax subclass. For this, businesses are split into two categories:
– Businesses located in the downtown, central waterfront, designated growth centres, or avenues in the City’s official plan.
- Qualification requires businesses to be classified within the commercial tax class; a Current Value Assessment of less than $7 million; operating out of a lot less than 7,500 square feet or for commercial condos a gross floor area of less than 2500 square feet.
– Businesses located anywhere else in the City.
- Qualification requires businesses to be classified within the commercial tax class; a Current Value Assessment of less than $1 million.
The suggested tax relief would therefore provide a considerable number of Toronto businesses with extra cash to bolster their post-pandemic recovery, as the City of Toronto experiences a period of rejuvenation.