Presentation to Finance Committee

1
Presentation to Finance Committee

• City of St. Johns
• November 27, 2008

2
Who is CFIB?

• Not-for-profit non-partisan
• 105,000 members, nationally
• 1,700 in Newfoundland and Labrador
• 300 in St. Johns
• Voice for our members
• Policy stance decided by our members
• One member one vote principle

3
SMEs in Newfoundland and Labrador

• SMEs
• account for approximately 99 per cent of all
  businesses in the province
• employ just over half of Newfoundlanders and
  Labradorians
• account for half of provincial GDP

4
Issues of importance to SMEs (St. Johns)
5
How do you rate your local government on the
following issues? Property Tax
6
The Tax Gap

• Ratio between commercial and residential
  municipal taxes
• A tax gap of one indicates equal treatment for
  commercial and residential property
• A tax gap greater than one indicates a municipal
  tax system that favours the residential property
  owner
• The larger the tax gap, the larger the distortion
  or unfairness in the tax system

7
Total Municipal Tax Gap
8
Recommendations Narrow the tax gap

• Immediately cap the difference between mill rates
  on residential and commercial properties
• Provincial government must legislate a range of
  fairness between residential and commercial
  property tax rates

9
Recommendations (continued)Adopt a user pay
philosophy

• User fees provide consumers with a choice to pay
  for a particular municipal service
• 63 of business owners believe that fees should
  be roughly equivalent to the cost of providing
  municipal services
• Any user pay arrangement must result in a
  commensurate reduction in municipal taxes

10
Growth in Municipal Spending, St. Johns, NL,
2003-2008
Recommendations (continued)Control spending
11
Recommendations (continued)Eliminate the
Business Tax

• CFIB asked its members
• Do you support blending the business tax with
  the commercial property tax?
• Results suggest business owners do not support
  the mere blending of the municipal business tax
  with commercial property taxes

12
Recommendations (continued)Municipalities must
not have the authority to levy new taxation powers

• Should municipalities have the authority to levy
  a range of new taxes in addition to property
  taxes (e.g. parking tax, tourism tax, alcohol
  tax, tobacco tax, etc.)?

13
Summary of Recommendations

• Narrow the tax gap
• Cap the difference between mill rates on
  residential and commercial properties and
• Provincial government must legislate a range of
  fairness between residential and commercial
  property tax rates
• Adopt a user pay philosophy
• Control spending
• Eliminate the Business Tax
• Municipalities must not have the authority to
  levy new taxation powers

14
Anytime you create efficiencies, it makes for
good business. With the current state of our
economy, we have to be very mindful of our
expenses and try and reduce or eliminate where we
can. (CFIB member)
Thank you