Businesses in Winnipeg have the "privilege" of paying two major taxes to City Hall. Like homeowners, businesses pay property taxes. However, unlike homeowners, they also pay a bonus tax called the business tax.
Unfortunately, Winnipeg businesses don't receive cake or special services for it -- it's just another tax.

The tax is calculated on the rental value of a business's space - and it is not cheap. Chances are the little convenience store at the end of your street is paying thousands of dollars a year in business taxes on top of the property taxes they already pay.

The nine year residential property tax freeze has brought Winnipeg rates more in line with other cities across Canada. Combined property taxes paid by business are another story. According to KPMG's tax calculator, which lets the user compare the taxes paid by businesses in cities across the world, total property taxed paid by Winnipeg businesses are the highest of Canada's large cities.

The good news is the mayor is committed to eliminating the job killing tax with the rate to be brought down to 7.75 percent for all businesses in the city as a first step. The newly created Economic Opportunities Commission meanwhile will provide recommendations as to the tax can be eliminated altogether.

Normally, the Canadian Taxpayers Federation (CTF) is not a fan of government commissions that spend months producing reports only to collect dust on some bureaucrat's desk. But the CTF accepted a position on the commission as there is optimism that the new council will swiftly act on the recommendations since long-term economic growth hinges upon a competitive tax regime.

For 2007, the Conference Board of Canada projects Winnipeg's economy to grow by 2.9 percent, slightly ahead of the national average. Yet the 2008-2011 projections aren't so rosy -- our city is projected fall from 7th place overall to 11th in the 20 city study. This puts Winnipeg well below the national average.

To support the case for reduction and eventual elimination of the business tax, one need only look at the modest tax relief offered up by the Doer government. From 2000 to 2005, the provincial small business tax rate fell from 9 percent to 4.5 percent and marginal reductions were made to business and personal income tax rates. The result Over the six year period, Manitoba's sales and income tax revenues increased by nearly $500 million.
During the same period, unemployment dropped from 5.6 to 4.8 percent.

Evidence of the same is abundant. When former Premier Mike Harris came to power in neighboring Ontario after years of tax hikes, high deficits and stagnant growth, he delivered substantial tax cuts from 1996 to 2001.
During this time, Ontario coffers saw income tax and sales tax revenue increase by $11 billion or 38.5 percent. More importantly, when Harris took office in 1995 the unemployment rate was 8.7 percent. By 2001 it had dropped to 6.3 percent - a reduction of 28 percent! Not to mention the 5 year GDP growth average during this period was 5.5%.

The point of all this is that eliminating the city's business tax will help Winnipeg's economy. It'll help businesses expand, create new jobs and retain existing workers. More people working and paying taxes mean more money for police, roads and our parks.

Please e-mail the Commission with your thoughts on how to move Winnipeg forward at [email protected] or visit the web site - www.winnipeg.ca/meoc.