One has to wonder who is running the show over at City Hall when Mayor Sam Katz admitted that he only learned about the increased assessments for businesses after he read it in the Winnipeg Sun. Of the 11,389 Winnipeg business properties reassessed this year, 57 per cent will see an increase, and 40 per cent will see a decrease - but here's the catch, some businesses are staring down a 60-100 per cent tax increase.

Unlike residential property reassessment, where the city usually adjusts the mill rate to keep taxes either frozen or lowered, the business tax rate is not touched. For instance, if the assessment on your business goes up 20 per cent, so will your tax bill. Even though the business tax rate has been lowered for the downtown by two points from 9.75 to 7.75, the higher rate still applies for a majority of the business community. The city's revenue stream also increases in each assessment year. For example in 2001, the city collected $56 million in business tax revenue, the following year with reassessment, the city raked in $62.5 million.

But the question still remains, why wasn't the Mayor and his Executive Policy Committee prepared for these changes Why didn't the administration, who were the ones collecting all of the data from the Assessment Department, offer solutions to mitigate the increases before panic ensued These are important questions considering that the Chief Administrative Officer (CAO), who earns over $200,000 a year, is paid to provide City Council with a range of options to keep taxes from skyrocketing. But the responsibility does not only lie with the CAO's office, no one in the Mayor's office raised a red flag when an initial report came before council earlier this year.

Regardless of who is to blame, the most important question now is what will be done to address the unreasonable increases many businesses are facing.

One thing that the Mayor must now consider is accelerating the timeline to eliminate the business tax. The current strategy to phase out the business tax over seven years will not work since there will be yet another reassessment in 2008. Furthermore, issues like affordability, competition and long-term revenue growth hinge on a sensible solution to phasing out this regressive tax. The other problem with the business tax is that it is profit-insensitive. Therefore a more aggressive attack on business taxes would release the uncompetitive tax burden on Winnipeg businesses without causing too much disruption to revenue streams.

Other cities in Canada such as Regina, Saskatoon and Vancouver have eliminated their business taxes - but Winnipeg's 9.75 (7.75 for downtown) rate still exists. This already puts us at a significant disadvantage. It is time for our elected officials to do their part by lowering and eventually phasing out the tax. Not only would this help stimulate the economy and put downward pressure on outmigration, it would give Winnipeg businesses a competitive advantage.

This is Mayor Katz's opportunity to show some true leadership when it comes to Winnipeg's business tax; over 11,000 entrepreneurs and job creators are watching with anticipation to see what his next move will be.