Toronto’s Small Business Owners Are Third Class Citizens

The owners of Toronto’s small businesses are being treated like third class citizens by the
City of Toronto. Everyone else seems to be valued and protected except us. Quite rightly
there are rules that state that residential tenants cannot have their rents increased by more
than 3% per year, since large rent increases would be devastating for ordinary people.
Quite rightly low income seniors who own houses but who cannot pay increasing taxes
on their properties are protected from losing their homes.

There is no protection for small business however. It’s as if in the mindset of City
politicians and staff is that there is absolutely no difference between Toronto’s ten of
thousands of small business owners and major corporations. There is this notion at City
Hall that because we own businesses, that we are in the same category as large businesses
and should be taxed using the same formulas. There is this notion that no matter what
abuse the City dishes out, that actual people are not getting hurt when taxes are raised
overnight by 100% or when our customers are denied access to our premises for months
or years during major city construction projects.

The reality is that most Toronto small businesses are just Mom and Pop type entities, in
which individuals are either self-employed or work themselves and have several
employees. Where does the City get the idea that if taxes increase by $10,000, $20,000,
$30,000 and $80,000 in just one year, that we have the funds to just pay huge amounts.
Our reality is that if we are lucky enough to own a home we will have to mortgage it and
if we do not have one, we will have to take out lines of credit or build up high interest
credit card debt. Our sales certainly have not increased at the rates of the City’s punishing
new tax increases of 60 to 100% in one year, with further increases of the same sort for
the next three years.

This is a human rights issue. The way City Hall works, only Toronto’s homeowners are
treated like first class citizens. Although their homes have increased by 40% in value,
their tax increases are being limited to $55 per year in 2017. Toronto’s next group of
important citizens appear to be the banks and major corporations located in the City’s
financial district. Unlike Toronto’s main street small businesses, where commercial
properties tax bill have increased from 40 to 100% in 2017, the Financial District is only
getting an 18% increase this year. Why is this ? It’s because the Financial District’s
buildings are assessed using a different set of rules. Their tax assessments are based on
income occupancy, while main street buildings are assessed on highest and best use -- -
which is lethal in a market where property values are spiking wildly due to land
speculation for condo development.

The vast majority of main street businesses are tenants, not building owners. Their reality
is that they have no building to cash in for millions when property values go way up and
will just face eviction once the building is sold. These tenants are trapped in two to five
year leases in which their contracts force them to pay any additional annual taxes,
maintenance and insurance increases on top of their base rent. In the past this was not a

big problem, since non rent expenses like taxes would go up from 2 to 6 % in a year, which would be manageable.

This year, tenants are being expected to pay huge increases ranging from 40 to 100%.
They cannot just leave since their landlord can sue them for breaking their lease. If they
stay, they likely will go bankrupt or will be in such deep debt that they will likely never
personally recover from it.

We are talking about individuals here. They might own businesses, but they are just
ordinary people the way residential homeowners and seniors are. Why is the City of
Toronto putting them in such a dangerous position ? Are they not deserving of fairness
and protection like everyone else ? Not everyone can get a secure and well paid job
working for government or large corporations. Tens of thousands of people in this City
are very vulnerable and have created jobs for themselves and others by setting up small
businesses in Toronto. It’s time that they were treated like human beings as well.

John Anderson, President
Yonge Street Small Business Association
August 27, 2017