CD Howe report on business property taxes
Before a business decides to locate or expand in a given jurisdiction, it must consider the tax implications. Heavy tax burdens reduce potential returns, driving investment away to other jurisdictions and, with it, the associated economic benefits. Interjurisdictional comparisons of tax regimes are, therefore, important for businesses and the governments that seek to attract and retain them.
Yet there are gaps in the way Canadian governments measure the overall tax burden on business investment, primarily because they ignore business property and land transfer taxes. As in previous editions in this series on inter-municipal business tax burden comparisons, we find this oversight of major significance: business property and land transfer taxes represent about two-thirds of the total investment tax burden.
Bringing these taxes into the mix for this study, we estimate the burdens of various business taxes for each province’s largest city, taking into consideration federal, provincial and local tax regimes. We again find the overall highest tax burdens to be in Saint John, Charlottetown and Montreal. As for the most competitive overall business tax environments, Saskatoon and Calgary still lead the way, but Calgary increasingly lag behind Saskatoon as Alberta’s business tax environment deteriorates.