“I am denouncing the inequality that exists between business owners in Montreal,” Projet Montréal leader Valérie Plante said. Marie-France Coallier / MONTREAL GAZETTE
Gaby Kassas invested $85,000 to get her bright and airy Café Sfouf up and running three years ago. Located in an attractive three-storey stone-walled building on Ontario St. E., business is good enough for her to hire five employees and pay down her debt.
Despite the restaurant’s popularity, she says she only brings in personal revenues of $20,000 a year. She fears a steep rent increase is coming, because the owners of the building she’s located in were hit with a 3-per-cent property tax hike in 2016 that saw their bill jump by $742. It’s a hit Kassas fears will be passed on to her that could spell the end of her café.
Meanwhile, at the Ultramar station a few hundred metres down the road on Ontario St., the owners saw their taxes drop by $1,188 last year.
“I’m asking the city, in what way are you supporting us, the small businesses?” Kassas said. “I have to ask the city administration — how much do you want from us?”
Opposition party Projet Montréal used Kassas and her café Tuesday as one of numerous examples where the taxes on buildings housing small businesses rose sharply, while those of large-brand businesses like Petro Canada, Tim Hortons and McDonald’s saw steep drops in 2016.
Among a dozen examples the party listed were:Esso Ville-Marie on Papineau Ave. – taxes decreased $3,583 Home Dépôt on Beaubien W. – taxes decreased $2,547 Ultramar at 5510 St-Denis St. – taxes decreased $2,517
Among more than two dozen buildings housing small businesses listed that saw tax hikes were:The building housing La Petite Maison restaurant on Park Ave. near St-Viateur Blvd. saw its taxes increase $1,192 Marché Laurier’s taxes went up $1,642 The building housing Marché 4 Frères on St-Laurent Blvd. — taxes increased $969.
Municipal evaluations are based on the value of the land and the property on it. While a gas station, with two pumps and a dépanneur may see its evaluation decrease, brick-and-mortar establishments that house small businesses, often with residential properties as well, almost never drop in value, said Glenn Castanheira, commercial adviser to Projet Montréal.
The party is calling on the city to find new ways to collect commercial income that will be more equitable.
“I am denouncing the inequality that exists between business owners in Montreal,” Projet Montréal leader Valérie Plante said. “(Montreal Mayor) Denis Coderre promised not to raise taxes more than one per cent for business owners, but this is false.”
In the last two city budgets, the Coderre administration had pledged tax increases on non-residential properties would be capped at an average of 0.9 per cent, as compared to the 3.3 per cent average seen in 2013. Property taxes account for 70 per cent of Montreal’s revenues.
Plante said they have seen small owners saddled with tax hikes as high as 12 per cent, while larger retail brands have seen drops of as much as 3 per cent.
The city must find ways to foster healthy competition, such as the so-called “Robin Hood” solution used in Quebec City to spread tax burdens more evenly among business owners. Solutions could include looking at the rental value of a property as opposed to just its property value, or basing tax rates on square footage, business revenues or the neighbourhood in which businesses are located.
In Manhattan, Castanheira noted, businesses are charged a 7-per-cent rent tax, as compared to Montreal’s practice of taxing the landlord. In Germany, business taxes are based on revenues and square footage.
Marc-André Gosselin, spokesman for the mayor’s office, said Projet Montréal appears to have cherry-picked examples that exaggerate differences between big-name stores and their smaller brethren. The city’s cuts to its non-residential tax rates put $18 million in the pockets of property owners that will spur the economy, he said.
The reality is that the taxation of the city is equitable for all categories of commerce and does not favour one over the other,” Gosselin wrote in an email.
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