Montreal's Commercial Property Taxes Reach New High

Tax survey shows other Canadian cities lowering realty taxes to encourage growth, while Montreal goes in the opposite direction
Montreal's commercial tax rates continued to increase with startling speed in 2013, soaring for the second year in a row past Canada's two other highest-rate cities, Vancouver and Toronto. This was part of the "encouraging and alarming" results revealed in the 2013 Property Tax Rate Analysis produced by Altus Group for The Real Property Association of Canada (REALpac), released today.
Despite Montreal, Toronto and Vancouver posting the highest commercial-to-residential tax ratios, all in excess of 4:1, Toronto continued its slow but steady downward trend for the tenth consecutive year. Vancouver's slight increase was attributed to reductions in its residential taxes that outpaced those of its commercial rate.
REALpac has long advocated for a commercial-to-residential ratio of about 2:1, which the association maintains is needed to support healthy economic growth, and could be achieved through gradual reductions. Toronto, in particular, has been on a "watch list" for many years for having excessively high commercial tax rates that are out of balance with residential taxes, acting as a deterrent to downtown business and job growth and commercial real estate investment. Now, Montreal is at the top of the list.
Montreal's commercial-to-residential ratio increased by 2.7% year over year, reaching a new high-water mark of 4.40 in 2013, compared to Vancouver at 4.35 and Toronto at 4.07.
"For the first time, Montreal has vaulted past Vancouver and Toronto and has the highest commercial-to-residential tax ratio in Canada," said Carolyn Lane, VP, Membership, Marketing & Communications, REALpac.
The survey cites Calgary and Edmonton as making the most significant year-over-year improvements to their ratios, at 14% and 5% decreases, respectively. Toronto, Halifax and Winnipeg saw decreases between 1% and 2.2%. This enabled Halifax and Winnipeg to keep their ratios well below the national average of just over 3:1 among the municipalities surveyed. Ottawa was subject to a slight increase of 1.8% compared to 2012, but still kept its ratio below the average. Still, the survey points to continued concerns about high realty tax rates in Vancouver, Toronto and especially Montreal.
"The sustainability of our urban centres is vitally important. High realty taxes are a barrier to business growth and deter investment in downtown office, hotel, apartment, and retail property development. With so many shifts taking place in our global economy, Canadian cities need to be seen as competitive with other markets in the U.S. and around the world," added Lane.
On an absolute tax basis, Calgary, Vancouver, Edmonton and Winnipeg have the lowest estimated property taxes per $1,000 of commercial assessment, while Toronto, Ottawa, Montreal and Halifax have the highest. On the residential assessment side, Vancouver, Calgary, Edmonton and Toronto have the lowest property taxes per $1,000 of residential assessment, while Winnipeg, Ottawa, Montreal and Halifax have the highest.
While most cities in Canada have moved to decrease commercial tax rates in the last ten years, the survey notes that residential tax rates have declined at an even faster rate.
The 2013 Property Tax Rate Analysis may be downloaded from the REALpac website at

on October 25, 2013