Altus Group and the Real Property Association of Canada released their Canadian Property Tax Rate Benchmark Report for 2021, which provides an in-depth look at commercial and residential property tax rates in 11 cities across Canada.
The average commercial-to-residential tax ratio for the cities surveyed in 2021 was 2.73, a negative trend reflecting a 3.0 per cent increase from 2.65 in 2020, largely driven by a significant increase in Vancouver’s ratio due to the 2021 reversal of the Provincial School Tax reduction of 2020, along with moderate increases in Calgary and Edmonton.
This year’s spotlight component takes a deeper look into how current the assessments are in each city, as well as the variables that determine the fair distribution of property taxes, revealing that assessments are the least current in Toronto and Ottawa where assessed values would now be eight years outdated, under current legislation, by the end of 2022.
- Vancouver’s ratio began trending downward in 2017 to a historic low of 2.30 in 2020, but the 2021 reversal of the Provincial School Tax reduction of 2020 caused the city’s ratio to rebound to 3.41. Vancouver returns to sitting well above the average ratio.
- Calgary’s downtown office properties continue to struggle, resulting in a shrinking non-residential tax base. With increasing commercial tax rates and a decreasing residential tax rate, Calgary returns to the trend of a rising commercial-to-residential ratio now sitting above the survey average at 2.78.
- Montreal continued a three-year trend of posting the highest commercial-to-residential ratio, currently sitting at 4.17. The city’s ratio rose 1.5 per cent in 2021, marking the second year in a row to post a commercial-to-residential ratio exceeding 4:1. The ratio first rose above the survey average in 2008 and has been steadily climbing since, increasing 16 out of the last 18 years.
- Quebec City first climbed above the average in 2013 and remains well above the average in 2021 with a ratio of 3.47.
- Halifax saw a slight decrease in commercial rates and a lesser decrease in residential rates, resulting in a ratio decrease of 0.79 per cent to 2.85.
- Edmonton saw an increase to the city’s ratio of 5.7 per cent in 2021 but remains just below the average with a ratio of 2.52.
- Ottawa has slowly been decreasing since 2017 and now posts a ratio of 2.37.
- Toronto continued its 17-year trend of decreasing its ratio. This is consistent with the City’s strategy to enhance the business climate by reducing tax rates for commercial, industrial, and multi-residential properties to target 2.5 times that of the residential tax rate. The City expects to reach this targeted tax ratio by 2023, however, commercial rates will need to come down more if Toronto is to meet this goal ratio.
- Winnipeg saw a slight decrease in commercial rates and a simultaneous increase in residential rates, resulting in a ratio decrease of 0.6 per cent to 1.93.
- Saskatoon and Regina ratios decreased in 2021 by 6.3 per cent and 13.4 per cent, respectively, after remaining relatively stable from 2017-2020.