Real Estate News Exchange (RENX)
c/o Squall Inc.
P.O. Box 1484, Stn. B
Ottawa, Ontario, K1P 5P6
Canada: 1-855-569-6300

Tax increase hits Saskatoon commercial owners hardest

The City of Saskatoon has tabled its epic discussion on a two-year budget for 2020-’21. While the...

The City of Saskatoon has tabled its epic discussion on a two-year budget for 2020-’21.

While the preliminary budget released this summer projected a 3.97 per cent property tax increase overall, we can all breathe a sigh of relief because it will be only 3.7 per cent.

Wait, what the heck?! That’s still a lot!

This is not good news for anyone, especially commercial property owners who already carry a greater tax load than their residential counterparts.

Commercial vs. residential tax ratios

As Barry Stuart reported last fall, across Canada commercial property owners carry more of the tax bill than homeowners.

The fairness of this system is questionable; while we all want to pay lower taxes on our homes, it’s not sustainable for businesses to pick up an unequitable share.

Altus Group, which produce the annual Canadian Property Tax Rate Benchmark report, suggested in its 2019 edition that lower commercial property taxes, “help make cities more competitive, promote job growth and investment, and subsequently generate more stable and sustainable revenue.”

It reports the 2019 ratio between commercial to residential tax is 1.71 in Saskatoon and 1.74 in Regina.

That is to say, the commercial tax rate is 1.71 times the residential tax rate on the same assessed property value.

Saskatoon and Regina have the lowest ratios in Canada, with Montreal topping out at 3.93 times the commercial-to-residential spread.

An increase for everyone

This is the biggest tax hike in recent history for all property owners, commercial and residential. The city has consistently posted increases between 2.11 and 2.88 per cent from 2016 to 2019.

The 3.7 per cent increase for 2020 will be followed by a 3.86 per cent increase in 2021.

I live in a modest home in an established neighbourhood.

So far as city services go, we received the bare minimum last year; mostly twice-monthly garbage/recycling pick-up and one street sweep.

In 2016, we paid $3,157.69 between the city and education property taxes; that number will jump a total of 11.43 per cent by 2020 to $3,518.70.

That may not seem too impactful, but can you imagine the spread those numbers equate to as they are applied over multi-million-dollar portfolios?

No postponing bad news

If the current increase isn’t tough enough to swallow, there will be no big reveal for the 2021 budget as it too has been set.

I’m not sure if I prefer that bit of news in advance or not. It certainly allows me to start my complaining earlier.

And if you’re curious what I think might be one of the reasons the City of Saskatoon tax increases continue to outstrip the inflation rate by nearly double?

I’ve questioned if there is enough research on revenue being generated from lots in urban sprawl expansion versus the true cost of extending service to those areas.

I’m not convinced the city has really identified the full costs of these neighbourhoods and passed it onto those property owners.

I’ve said it before, density is the only way to tax salvation in my mind.

Industry Events