Status of Small Business Property Tax Subclass Implementation

In its consideration of this item, Council also directed the Chief Financial Officer and Treasurer, in consultation with the City Solicitor, to report back in 2022 on: - the feasibility of developing a mechanism for ensuring that subclass property owners with tenants in gross leases pass down the benefits of the reduced property taxes to those tenants; and - if such a mechanism is not feasible by the City, whether changes to provincial laws could be made to achieve this objective. In addition, Council directed the Chief Financial Officer and Treasurer to collaborate with Strategic Communications to develop a public awareness campaign directed at both property owners and business operators/tenants about the Subclass, including how it works and who should benefit from it. In response to these directions, staff have examined possible mechanisms to require property owners to pass through tax reductions to tenants. Given that current legislation does not provide a mechanism by which the City can interfere in the contractual relationship between a commercial landlord and their tenant, it appears that the City has limited means available to enforce a pass-through of property tax decreases to tenants. A public awareness campaign for the Subclass is under development to ensure that business owners and tenants are informed of the tax reductions available, and the dispute/appeal mechanisms that are available. This information is outlined within this report.