I wrote recently about how Glenburn Soda Fountain in North Burnaby had to raise its prices due to inflationary costs.
One key item was the fact that the owners said their rent had been jacked up 60% after a long period of slower sales due to COVID-19.
Glenburn is hardly the only local business to see their rent hike by an absurd amount.
I don’t know what’s in the mind of commercial property owners or the cost pressures they face. Maybe their property taxes have skyrocketed as well, forcing them to raise rents a lot.
But the fact is that these rent hikes are pushing Burnaby businesses to the brink. There has been a long string of business closures in the past two years and some of those owners have told me the final nail was having to renew their lease and facing a ginormous rent hike that just wasn’t sustainable based on a loss of business due to the pandemic.
Many of these businesses that have closed are small, independent restaurants and they’ve been replaced by big chain restaurants – some that are global franchises – that have deep pockets to afford these rents.
I often wonder if one day the only restaurants that will remain will be large chains. It’s getting that bad.
The Burnaby Board of Trade has seen this trend and is recommending three specific tax policies to be renewed to help bolster the business community and the economic recovery, specifically: cutting business property taxes again, delaying a planned increase in the carbon tax, and providing deferrals of employer health tax payments - all of which were implemented only for 2020.
In 2020, the provincial government reduced the school tax for commercial properties in classes 4, 5, 6, 7 and 8. As school tax makes up a significant portion of municipal tax bills, the result was an average 25% reduction in property tax bills for businesses. Renewing this tax cut would provide cash flow support directly to businesses for the coming year, allowing them to better plan staffing and other investments.
“We know of businesses where their property tax bill is as big as their rent – thousands and thousands per month,” said Paul Holden, president and CEO of the BBoT. “Until such time as the province can fix the underlying issue of ‘highest and best use valuation’ which is causing these huge bills, we would like to see last year’s reduction in property taxes renewed.”
Follow Chris Campbell on Twitter @shinebox44.
