A recent CD Howe 2015 report card of business tax burdens in Canada’s Major Cities highlights that a when a business decides to start up or expand operations in a given locality, it must take into account the total tax burden on the investment, and how it affects the potential return. Heavy tax burdens can drive away investment to other localities and with it, the associated economic benefits.
Comparing tax burdens is thus important for businesses and the governments that seek to attract them. Yet there are gaps in the way Canadian governments measure the tax burden on business investment. They ignore provincial and local property taxes and land transfer taxes. In this study, we find this to be a large oversight: total business property and land transfer taxes represent about two-thirds of the total tax wedge on investment in Canada.
Using this more complete measure, they estimated the tax burdens of the largest cities in each province. We find that Saint John, Charlottetown, and Montreal have the highest total tax rates – i.e., combined federal, provincial and local rates. Saskatoon and Calgary lead the pack with the most competitive overall business tax environments. Calgary, Saint John and Halifax are the only three cities in which we find higher taxes in 2015 than 2014, mainly because of higher provincial taxes.
What the report does not take into account are your individual property tax assessments, that can significantly increase your taxes if the assessment is not based on your particular facts. Call us and we can provide a free consultation, to see if we can obtain a tax refund for you.