As the COVID-19 pandemic persists and public health orders continue to restrict regular business activity, the Burnaby Board of Trade – Burnaby’s chamber of commerce and largest business association – is calling for the provincial government to renew three tax cuts and deferrals it introduced last year and which are set to expire.
The Burnaby Board of Trade is recommending three specific tax policies to be renewed to help bolster the business community and the economic recovery in 2021, specifically: cutting business property taxes again, delaying a planned increase in the carbon tax, and providing deferrals of employer health tax payments - all of which were implemented only for 2020.
Cut Property Taxes Again
In 2020, the provincial government reduced the school tax for commercial properties in classes 4, 5, 6, 7 and 8. As school tax makes up a significant portion of municipal tax bills, the result was an average 25% reduction in property tax bills for businesses. Renewing this tax cut would provide cash flow support directly to businesses for the coming year, allowing them to better plan staffing and other investments.
“We know of businesses where their property tax bill is as big as their rent – thousands and thousands per month,” said Paul Holden, president and CEO of the BBoT. “Until such time as the province can fix the underlying issue of ‘highest and best use valuation’ which is causing these huge bills, we would like to see last year’s reduction in property taxes renewed for 2021.”
Delay the Carbon Tax Increase
In 2020, the provincial government delayed a planned increase to the BC carbon tax rates until April 1, 2021. The planned increase will raise the carbon tax rate from $40 per tonne to $45 per tonne. The Burnaby Board of Trade supports the market-based price on carbon, but suggests a further delay would be prudent as we may still be in the midst of the second wave of the pandemic and continued restrictions on business come April 1.
Provide Employer Health Tax Deferred Installments
In 2020, the provincial government allowed businesses which pay the Employer Health Tax in quarterly installments to defer those payments until December 31, January 31, February 28, and March 31. This allowed businesses the flexibility to manage their cash flow and make these payments at a time when this cost would cause the least disruption to the business. For 2021, the BBOT wants businesses to have this same flexibility.
“The Employer Health Tax is a tax on hiring, plain and simple,” said Holden. “Until we can improve it and exempt more small businesses from it, as other provinces have done, providing flexibility for the payments would be a useful tool for businesses to have.”