Surrey business owners staggering under current property tax bills, which they say have increased by anything from 17 per cent to 86 per cent over last year, are struggling to understand why it’s happening.
And, inevitably, fingers of blame are being pointed at Surrey council.
Some question why the mill rate – the amount of tax payable per dollar of the assessed value of a property –could not have been lowered to compensate for provincial school taxes that are back in the bill this year, and increases in property assessments as a result of a jump in the market late last year.
Mayor Doug McCallum and his Safe Surrey Coalition says the budget holds the line with a general property tax increase of 2.9 per cent for the third year in a row. But the minority on council argued, when the budget was passed last December, that Surrey residents’ tax bill will be much more than that, with some paying 12 to 15 per cent more in 2021.
A particular bone of contention for many critical of the budget is a 200-per-cent increase in the capital parcel tax increase, which sat at $100 per parcel but is now increasing to $300. The intent of this tax is to pay for 16 community projects, among them a city centre sports complex and various park improvements.
Inder Nijjer, senior manager of Surrey-based Property Tax Services, which advises both business and residential clients, said that direct comparisons between 2021 and 2020 can be deceptive.
He noted, for example, the provincial school taxes were suspended last year as a way of offsetting impacts of COVID-19.
“It’s probably better that one compare the rates between 2019 and 2021,” he said.
But that’s of little comfort to George ‘Bud’ Ivey, CEO of South Surrey-based Ivey International – an award-winning global environmental technology company – who said he’s still reeling from a 74.4-per-cent increase in business property taxes.
Even if some things are back on the tax bill that weren’t there in 2020, the increase over 2019 would still be “north of 50 per cent,” he said.
His tax bill is $9,130.97 for 2021, while it was $5,232.45 in 2020, Ivey said.
“I don’t know whether it’s ultimately the province or Surrey that’s behind this, but somebody should know something.”
He noted that, while he sees a significant line-item increase for school taxes on his bill, he also sees an equally significant one for policing costs.
“That gets into the whole debate of whether Surrey should have its own police force or not…I’m saying if they are going to start downloading all of that onto businesses, we’re going to start saying ‘is this a business-friendly environment?’ Businesses can move elsewhere.”
Other neighbouring companies are beginning to talk seriously of relocation, Ivey added.
“You start to think ‘what are the taxes like in Alberta? What are they like in Ontario, or even somewhere else in B.C.? If they expect businesses to shoulder this, there’s going to be a rude awakening for somebody.”
Ivey’s building is owned by his holding company, he explained.
“We don’t make a heap of money on the building…this is chopping double-digits out of my profit margin.”
That defeats the idea of a locally-based company being able to build assets, he said, while impacts in the thousands of dollars may also make the difference between hiring a new employee or not.
Certainly such increases will end up being passed on in increased costs, whether to other companies or individual consumers, which can only result in increased inflation, he said.
“You have to be careful of the ripple effect,” Ivey said adding that businesses and individuals are still struggling with the economic impacts of COVID-19.
“Do they think we all just made this a banner year for profits?
Smaller businesses in Surrey have also been hard-hit with increases.
Roberta Stoddart-Payne, owner of Dogwood Awards and Engraving in South Surrey, said her business property taxes have jumped some 47 per cent from close to $3,600 in 2020 to almost $6,000 this year.
She noted that her business, which creates trophies and awards, particularly for sporting events, has had a hard enough time over the last year due to the cancellation of meets and tournaments.
“If you’ve have a problem with COVID-19 affecting your business, you’re not in a good position to pay that kind of bill,” she added
“I was blown away – I have absolutely no idea why this happened. It’s the same thing with other businesses in our building. Nobody knows why it is. There has been nothing to explain this – even if I had a reason, it would be better.
“Surrey council should know better. We’re in a pandemic. To allow taxes to increase by that much seems absolutely irresponsible.”
Surrey Mayor Doug McCallum has not yet responded to a request for comment.
– With files from Tom Zytaruk