A new IMFG Paper evaluates the impact of lowering business property tax rates on business location and employment in major Ontario cities. High business property tax rates can contribute to the suburbanization of employment in Ontario. The paper, by University of Toronto Professor of Economics Michael Smart, looks at the impacts of property tax reforms during the 2001 to 2004 period.
The 2001 to 2004 reform was large, reducing taxes paid on commercial and industrial properties by about $2 billion per year, largely at the expense of residential taxpayers. Professor Smart finds the reform had small but significant positive impacts on the number of businesses and jobs in the affected cities. The paper concludes with an analysis of the effects of the reform on businesses, land owners, and downtown and suburban residents.
Entitled The Reform of Business Property Tax in Ontario: An Evaluation, this paper is the latest in an ongoing series of publications by the Institute on Municipal Finance and Governance (IMFG), intended to inform debate on the fiscal health of cities and city-regions.
IMFG is also releasing another publication in the IMFG Papers series, which consists of two papers by graduate students associated with the Institute:
- The first, Development Charges across Canada: An Underutilized Growth Management Tool? by Mia Baumeister, examines whether and how cities across Canada are using development charges to encourage more compact and sustainable urban growth.
- The second, Preparing for the Costs of Extreme Weather in Canadian Cities: Issues, Tools, Ideas by Cayley Burgess, describes how cities are financially affected by events such as storms and floods and how they can prepare for the costs of weather-related disasters.
The Institute on Municipal Finance and Governance, at the University of Toronto’s Munk School of Global Affairs, focuses on the fiscal and governance problems facing large cities and city-regions.
The IMFG Papers on Municipal Finance and Governance are designed to disseminate research being undertaken in Canada and abroad on municipal finance and governance issues. The series includes papers by academics and graduate students as well as international scholars, which are archived on IMFG’s website: http://munkschool.utoronto.ca/imfg/resources/?cat=10.