I found this article about forestry companies in British Columbia quite interesting - (see here). Basically these companies are refusing to pay their property taxes because they don't believe they get the return on investment they deserve. It's an interesting dilemma - most municipalities rely on industrial and commercial property taxes to subsidize residential rates and provide services to their citizens. The bigger the industrial base, the better the services. For instance, take a look at the City of Toronto's various property tax rates:
|Description||City Tax Rate %||Education Tax Rate %||Total Tax Rate %|
|Residual Commercial - Band 1||1.9776151%||1.8030600%||3.7806751%|
|Residual Commercial - Band 2||2.0431761%||1.8030600%||3.8462361%|
Notice the difference in how much a single-family residential property pays in relation to the industrial property owner. There's a big difference. This despite the fact that factories don't use community centres, libraries, pools, schools, and the other myriad of city services. At the end of the day, residential property owners live off the fat that industrial development brings to a community, as they not only provide jobs, but more importantly, pay for the services citizens enjoy.
This is a reality that often confounds me. Take Toronto for instance - the reason it has been successful and was a magnet for immigration was that there was an abundance of manufacturing jobs. Nowadays, thanks to land speculation and city policies, industry is slowly being forced out of Toronto. What replaces these industries and their jobs? Condos or big-box developments. However, condos don't pay the same tax rate (nor do they provide long-term jobs) and big-box stores don't provide the wages that the former manufacturing plants did. This can only spell trouble for the city because, let's face it, not everybody can or strives to be a part of Richard Florida's "Creative Class".
It will be interesting to see how this battle in British Columbia plays out - if the companies are successful in getting their demands, it could drastically change how municipalities fund their operations. In the process though this has the potential to finally highlight who actually pays the bills in municipalities. Too bad that will mean higher taxes for everyone.