Municipal Commercial Tax Policy Engagement
Regional Council and community stakeholders have expressed interest about this topic and, as such, staff have commissioned an economic analysis, along with internal analysis and research. In addition to these efforts, an understanding of the commercial sector’s perspective and viewpoints will be critical to an informed deliberation by Council regarding next steps.
A stakeholder workshop was held on Jan. 18, 2018 with members of the commercial sector to garner insights regarding their perspectives of the commercial property tax system in the municipality.
Residents are encouraged to review the policy information package below which reflects a significant amount of work and thought conducted on this topic to date.
Feedback gathered from the stakeholder workshop and the online survey will be used by staff to inform a report to Council, which is expected to be presented later in 2018.
Commercial Tax Policy Information Package
Information presented, and feedback gathered, at workshop: Jan. 18, 2018
- Commercial Tax Timeline: How We Got Here – Staff presentation to stakeholder workshop (Jan. 18, 2018)
- Commercial Tax: Objectives and Options – Staff presentation to stakeholder workshop (Jan. 18, 2018)
- An Economic Analysis of the Halifax Regional Municipality Commercial Tax – CanMac Economics presentation to stakeholder workshop (Jan. 18, 2018)
- Summary of Commercial Tax Workshop (Jan. 18, 2018)
- What We Heard: Commercial Tax Workshop (Jan. 18, 2018)
Commercial Tax - Recommended Reading
- Municipal Commercial Tax Assessment – Halifax Partnership
- Bill 177 – Province of Nova Scotia
- Bill 52 – Province of Nova Scotia
- Commercial Tax Options for Small Business – Staff presentation to Regional Council’s Committee of the Whole (Nov. 10, 2015)
- City Benchmarking: Annual Property Taxes of Class A and B Office Buildings and Industrial Space – Altus Group Ltd (Sept. 2015)
- Commercial Tax Intensity Map for Regional Centre (2014)
- Hiding in Plain Sight: The Harmful Impact of Provincial Business Property Taxes – Commentary by the C.D. Howe Institute
- Study of Commercial Taxes as a Driver for Business Location Decisions – Altus Group Ltd (July 2012)
- Academic Paper: Property Tax Incentives for Business – Lincoln Institute of Land Policy (2012)
What has been the result of Commercial Tax Engagement and Policy?
Staff conducted multiple consultations with business, financial/economic analysis, and council reports from 2015 to 2021. Regional Council then directed staff to implement by By-law C-1200 and 2022-003-ADM.
As of April 1, 2023, Halifax Regional Municipality is administering Administrative Order 2022-003-ADM, this creates five tax areas and a tiered rate system. This replaces the existing commercial tax structure of Urban, Suburban and Rural.
Assessment Averaging, through By-law C-1200 has not ratified by the Minister of Municipal Affairs and Housing and will not be coming into force at this time. Regional Council approved this By-law in 2022 but Finance will not be administering this program in 2023/24. Details about Assessment Averaging can be found here.
How many commercial properties are in the Halifax Regional Municipality?
Per 2023 data, there are approximately 5,400 commercial properties in the region.
What were the legislative changes enacted by the Provincial Government to allow Regional Council to create both the By-law and Administrative Order?
From 2015-17, the Province passed two bills, Bill 177 and 52. Bill 52 is an extension of municipal charter powers and gives additional flexibility in how the Halifax Regional Municipality can tax property. Bill 177 is a commercial phase-in tool available to all municipalities in Nova Scotia.
What role does economic theory play in the presence of the property tax?
Economic theory focuses on the property tax as being a “benefit” tax, meaning providing public goods with services that reduce business costs. It also states the tax on capital, or marginal effective tax rate (METR), if unreasonably high, may have negative economic implications.
The municipality commissioned an economic study, what was the purpose and goal of the study?
In 2018, Finance staff engaged Canmac Economics, an econometric consultancy, to determine optimal changes to the commercial tax structure given current and prospective legislative powers. Canmac’s focus has been on determining the extent to which the commercial tax burden contributes to firm level investment decisions. Known in public finance circles as the Marginal Effective Tax Rate (METR), this is the 'tax wedge' between the before and after-tax rate of return on capital