The Reform of Business Property Tax in Ontario
Business property taxes in Ontario have fallen dramatically in the past decade, due to a series of reforms mandated by the provincial government. This paper discusses the likely impacts of the reforms on business location, wages, and land values, and the economic welfare of provincial residents. I use the reforms to estimate the responsiveness of business location and employment to local tax differentials. The reforms have caused a large shift in legal tax burdens from businesses to residents, particularly in Toronto and a few other cities. Based on my analysis, I conclude that the tax reform has had a small positive impact on employment in cities and on business productivity in Ontario.