'Crushing' tax hike of 24 per cent

Justin Williams opened his property tax bill for his family-owned business and was dumbfounded to see it increased by a whopping 24 per cent, and with a tax credit cut on the horizon - he's worried about his company's future.

The provincial government will be phasing out its school tax credits for businesses in the light industry sector in the next two years, and doubled with higher taxes - manufacturers in Burnaby are feeling the crunch.

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Williams co-owns Burnaby's Williams and White Inc. with his brother, which manufactures specialized grinding equipment used in the machine and cutting tool industry.

"This is unheard of," he said. "They are trying to crush small business."

Williams said his company tries to be a good neighbour and build the economy in the city, but it needs all the help it can get.

"It's tens of thousands of dollars in one year, and somehow we have to magically find it," he said. "How do you just, boom, adjust your budget? Everyone on my street is freaking out."

Although the company has survived the tough economic climate so far, Williams said business continues to be a competitive enterprise.

"We're going to have to cut investment," he said. "We'll have to find ways to cut costs. How else do you save money in a business? We're not going to be able to reinvest, not going to be able to stay competitive worldwide and that's what it's going to come back to.

"It's already a tough go out there, where the economy is at is very tumultuous still."

Williams said the government is trying to "get blood from a rock" and his business may consider a move to Alberta if things don't change.

"We've been in this community for three generations and we'd like to stay here, make it strong," he said. "Sometimes people just think that businesses are just an un-exhaustive resource that you can just keep on adding another hose to. We're not a money tree."

Light and medium industry, which Williams' company is categorized under, is critical for the economy, he says.

"And anything we can do to support small businesses in general is a good thing," he said. "It's what keeps our communities together."

Williams said he's seen what a lack of a business presence looks like in a small town and the Lower Mainland is not immune.

"I've witnessed it, and I don't think a lot of people who live in greater Vancouver have been to a small town that's been hit by a recession, where no one has any work, it's not fun," he said. "When you really think about it, restaurants don't generate business, newspapers don't generate, entertainment doesn't generate - only a few things in the economy that really generate and create wealth are either those who manufacture it, dig it out of the ground or grow it."

Williams said he was so furious about his property tax bill alone that he put in a call to the mayor.

However, the city does not set the tax and businesses should direct their concerns to the province, according to Burnaby Mayor Derek Corrigan.

"Business owners are calling the city to voice their extreme concern, not realizing that the city played no role in setting this tax," Corrigan stated in a media release. "The City of Burnaby - like cities throughout the province - simply collects the tax on behalf of the provincial government, as mandated by legislation."

Corrigan noted how the light industry sector is expected to get more tax increases next year, as well.

"Business owners are saying these increases were unexpected and astonishing and that they will severely impact light industry," he said.

The Canadian Taxpayers Federation has been blowing the horn on how businesses are facing higher taxes in Burnaby and the light industry owners "will be left scrambling" when the government cuts tax credits, according to Jordan Bateman, the federation's director.

"The best way to use tax dollars to encourage businesses to grow is to fairly apply lower tax levels across all sectors," Bateman stated in a media release. "No favourites, no special exemptions - just neutral, across the board tax reductions."

Bateman said the Canadian culture of tax credits is corrosive to a free market and the public should choose which businesses to support - not the government.

But, the government says it's set to get more revenue from eliminating the tax credits to light industry.

The province's Minister of Finance, Michael de Jong, reviews tax policy for each budget, according to Janet Stewart, communications manager for the Ministry of Finance.

"In budget 2013, the minister announced that the (light industry) school tax credit would be phased out over two years beginning in 2013 to restore the longstanding policy of treating businesses in (light industry) the same as those in (business) for school property tax purposes," Stewart said in an email.

The phase-out is expected to provide additional revenues of $32 million in 2013/14 and about $55 million every year after to "help protect important services for British Columbians," Stewart noted.

"In response to the economic crisis of 2008, the school tax credit was introduced in 2009 to provide relief to the province's industrial sectors and was provided to both (major industry) and (light industry)," she added.

There are about 20,000 light industry businesses in the province, which includes wineries, asphalt manufacturers, printing and publishing operations, sand and gravel operations and metal fabrication facilities.

According to the City of Burnaby, there are 400 light industry businesses in operating in Burnaby.

sseccia@burnabynow.com

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