British Columbia

'This is an existential crisis': Small businesses struggling as property taxes due

Small businesses across Metro Vancouver are feeling the pressure with property taxes due this week.

The Canadian Federation of Independent Business is advocating for governments to shift the tax burden

Shobna Kannusamy, who owns a pastry shop, says she has poured her heart and soul into the business but doesn't know what the future holds. (CBC )

Small businesses across Metro Vancouver are feeling the pressure with property taxes due this week. 

For many businesses, the annual tax increases are the final straw in a growing list of costs they must pay in order to keep their doors open. 

"Some months, we just break even and [make] nothing in profit," said Wissam Kadhem, owner of three  barber shops called Cut My Hair. 

The small business has three locations downtown. 

"The property tax is so high — I can't tell you the number because every year, it's different," Kadhem said.

At one point, Wissam Kadhem says he was paying about $5,000 a month in rent alone for a small business downtown. (CBC)

He pointed to the neighbourhood businesses around him that are closing, unable to keep up with rising costs. 

"We are very scared that, one day, it is going to happen to us. We won't be able to pay rent or pay our employees," he said. 

Kadhem is not the only business owner struggling with the property tax deadlines. 

Kadhem works seven days a week to keep the doors to his barber shops open. (CBC)

'More taxes for everyone else'

Aaron Aerts, the western economist for the Canadian Federation of Independent Business, has spoken to others in similar situations over the past month. 

"What we're hearing is a lot of pressure, stress and anxiety about what the future holds and what the next year's tax increase will look like," Aerts said.  

He's imploring municipalities to shift some of the tax burden off small businesses.

"This is an existential crisis for many businesses," he said. 

"If they are pushed out of our communities, we need to look at what that means — a smaller tax base and more taxes for everyone else."

Aaron Aerts emphasized that small businesses are the 'fabric of our communities' and questioned the impact when too many of them close. (CBC)

The City of Vancouver has been working with different municipalities in the region, the province and B.C. Assessment to address the spike in property assessments through a so-callled split assessment, which separates the development potential from how the property is being used.

Aerts says it's a step in the right direction but not enough to address the problem. 

"More needs to be done, and other municipalities in Metro Vancouver need to follow suit," he said. 

'Heart and soul'

For some businesses, the tax bill comes directly out of operating funds. 

"We're not able to leverage our cash into anything else that would help the business," said Shobna Kannusamy, the owner of Soirette Pastry Boutique in Coal Harbour.

"It's all tied up in rent and taxes."

Kannusamy says she would close her shop before lowering the quality of her desserts. (CBC)

Her property taxes amount to between $10,000 to $15,000 a year. 

"In a small business, every single dollar counts," she said. "That's our advertising budget gone."  

Kannusamy has run her small dessert bakery bakery for eight years but no longer knows what the future holds.

"It's hard, because you've poured your heart and soul into a small business. It takes up a decade of your life and then what?"

With files from Tina Lovgreen

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