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Taxes send jobs to suburbs
Calgary could take city's title as economic capital
Peter Kuitenbrouwer
National Post
Tuesday, October 17, 2006
CREDIT: Brent Foster, National Post
Three major office towers are to be built in Toronto, adding 3.2 million square feet of office space by 2009.
Higher taxes on business in Toronto are strangling the city's downtown and pushing companies to the 905 suburbs, the head of Toronto's powerful office tower coalition will tell the Economic Club today.
That trend is making Toronto a "dysfunctional" sprawl, which could allow Calgary to snatch its crown as Canada's economic capital, Juri Pill, chairman of the Toronto Office Coalition, said yesterday.
"Calgary is becoming a very serious competitor," Mr. Pill said, previewing his remarks to the Economic Club of Toronto at the Albany Club on King Street. ''The GTA should not take it for granted that it will always be the economic capital of Canada."
Businesses in Toronto pay about $1-billion more in taxes than they would if they were in the suburbs, Mr. Pill calculates.
As a result, since 1990, Toronto has lost 100,000 jobs, whereas the 905 region has gained 850,000 jobs, City of Toronto data shows. The 905 region surpassed the city in total number of jobs three years ago, and the suburbs now employ 1.55 million people, 150,000 more jobs than the city.
Toronto is becoming "Venice surrounded by Phoenix," Mr. Pill said. "The greater Toronto area is headed for a fall in terms of being dysfunctional," he said. "This is what I call dumb growth."
Of the $1-billion in additional tax that Toronto businesses pay, about $643-million comes from higher municipal taxes, to pay for such things as social services and transit, Mr. Pill said.
"We are the only jurisdiction in the developed world where property taxpayers are expected to pay for social services and 95% of transit," Mr. Pill said.
The other $292-million is additional tax imposed by the province for its Business Education Tax, over and above the amounts that businesses pay in the 905 region.
Mr. Pill said provincial education tax is inconsistent all over Ontario. For example, the City of Windsor, home to Chrysler, pays 52% more business education tax than Halton region, which is home to Ford.
The Ontario Chamber of Commerce has asked the Ontario government to equalize that tax to the lowest urban rate -- that paid in Halton -- by 2009.
"We feel that equalizing these taxes will increase economic competitiveness, create jobs, and by reducing sprawl in the GTA, make this a better place to live, work and raise a family," Mr. Pill said.
Toronto last year adopted a plan spearheaded by Mayor David Miller to make its business taxes competitive with neigbouring municipalities, by slowly increasing residential taxes by .47% over a 15-year period while lowering business rates by an equivalent amount. Mayoral candidate Jane Pitfield has promised to speed the process and make Toronto's business taxes equal to 905 municipalities within five years.
After years of stagnation, Toronto did see applications for building permits for three major office towers this year: Cadillac-Fairview is building a 43-storey tower for the Royal Bank at Wellington and Simcoe streets, Menkes is building a 30-storey tower for Telus on York Street near the Air Canada Centre, and Brookfield Properties plans a 50-storey tower for KPMG at Bay and Adelaide streets.
The projects will add 3.2-million square feet of office space to Toronto by 2009; Calgary has 12.5-million square feet of office space under construction.
ING Canada, a branch of the Dutch banking giant, is also moving downtown. ING said yesterday it will cut the ribbon tomorrow for new Toronto headquarters in the former Toronto Hydro building, at the corner of College and University streets.
Developers announced 19 office projects in the 905 region this year.
Don Eastwood, general manager of economic development for the City of Toronto, did not return calls yesterday.
The Toronto Office Coalition represents property owners and tenants of office buildings in the City of Toronto, who occupy approximately 55 million square feet of office space (35% of the leasable commercial space in the Greater Toronto Area) and employ about 250,000, mainly in the downtown core.
pkuitenbrouwer@nationalpost.com
- - -
Compare
2006 Business tax rates in Toronto compared with neighbouring municipalities:
Toronto
4.1% Commercial
4.4% Industrial
Mississauga
2.6% Commercial
2.9% Industrial
Markham
2.4% Commercial
2.6% Industrial
oakville
2.4% Commercial
3.6% Industrial
Vaughan
2.4% Commercial
2.6% Industrial
Taxes send jobs to suburbs
Calgary could take city's title as economic capital
Peter Kuitenbrouwer
National Post
Tuesday, October 17, 2006
CREDIT: Brent Foster, National Post
Three major office towers are to be built in Toronto, adding 3.2 million square feet of office space by 2009.
Higher taxes on business in Toronto are strangling the city's downtown and pushing companies to the 905 suburbs, the head of Toronto's powerful office tower coalition will tell the Economic Club today.
That trend is making Toronto a "dysfunctional" sprawl, which could allow Calgary to snatch its crown as Canada's economic capital, Juri Pill, chairman of the Toronto Office Coalition, said yesterday.
"Calgary is becoming a very serious competitor," Mr. Pill said, previewing his remarks to the Economic Club of Toronto at the Albany Club on King Street. ''The GTA should not take it for granted that it will always be the economic capital of Canada."
Businesses in Toronto pay about $1-billion more in taxes than they would if they were in the suburbs, Mr. Pill calculates.
As a result, since 1990, Toronto has lost 100,000 jobs, whereas the 905 region has gained 850,000 jobs, City of Toronto data shows. The 905 region surpassed the city in total number of jobs three years ago, and the suburbs now employ 1.55 million people, 150,000 more jobs than the city.
Toronto is becoming "Venice surrounded by Phoenix," Mr. Pill said. "The greater Toronto area is headed for a fall in terms of being dysfunctional," he said. "This is what I call dumb growth."
Of the $1-billion in additional tax that Toronto businesses pay, about $643-million comes from higher municipal taxes, to pay for such things as social services and transit, Mr. Pill said.
"We are the only jurisdiction in the developed world where property taxpayers are expected to pay for social services and 95% of transit," Mr. Pill said.
The other $292-million is additional tax imposed by the province for its Business Education Tax, over and above the amounts that businesses pay in the 905 region.
Mr. Pill said provincial education tax is inconsistent all over Ontario. For example, the City of Windsor, home to Chrysler, pays 52% more business education tax than Halton region, which is home to Ford.
The Ontario Chamber of Commerce has asked the Ontario government to equalize that tax to the lowest urban rate -- that paid in Halton -- by 2009.
"We feel that equalizing these taxes will increase economic competitiveness, create jobs, and by reducing sprawl in the GTA, make this a better place to live, work and raise a family," Mr. Pill said.
Toronto last year adopted a plan spearheaded by Mayor David Miller to make its business taxes competitive with neigbouring municipalities, by slowly increasing residential taxes by .47% over a 15-year period while lowering business rates by an equivalent amount. Mayoral candidate Jane Pitfield has promised to speed the process and make Toronto's business taxes equal to 905 municipalities within five years.
After years of stagnation, Toronto did see applications for building permits for three major office towers this year: Cadillac-Fairview is building a 43-storey tower for the Royal Bank at Wellington and Simcoe streets, Menkes is building a 30-storey tower for Telus on York Street near the Air Canada Centre, and Brookfield Properties plans a 50-storey tower for KPMG at Bay and Adelaide streets.
The projects will add 3.2-million square feet of office space to Toronto by 2009; Calgary has 12.5-million square feet of office space under construction.
ING Canada, a branch of the Dutch banking giant, is also moving downtown. ING said yesterday it will cut the ribbon tomorrow for new Toronto headquarters in the former Toronto Hydro building, at the corner of College and University streets.
Developers announced 19 office projects in the 905 region this year.
Don Eastwood, general manager of economic development for the City of Toronto, did not return calls yesterday.
The Toronto Office Coalition represents property owners and tenants of office buildings in the City of Toronto, who occupy approximately 55 million square feet of office space (35% of the leasable commercial space in the Greater Toronto Area) and employ about 250,000, mainly in the downtown core.
pkuitenbrouwer@nationalpost.com
- - -
Compare
2006 Business tax rates in Toronto compared with neighbouring municipalities:
Toronto
4.1% Commercial
4.4% Industrial
Mississauga
2.6% Commercial
2.9% Industrial
Markham
2.4% Commercial
2.6% Industrial
oakville
2.4% Commercial
3.6% Industrial
Vaughan
2.4% Commercial
2.6% Industrial