Property tax policy is drawing renewed attention in cities across the country, as municipalities weigh how much of the tax burden should fall on homeowners versus businesses, and as a mayoral election puts annual tax hikes under a political spotlight.
Saskatoon Opens Up the Ratio Debate
Saskatoon city hall is preparing to ask residents and business owners to weigh in on one of municipal politics’ most persistent flashpoints: the split between residential and non-residential property taxes. Starting in October, the city will run an online survey, with paper copies also available, alongside focus groups, to gather input on the ratio that determines how much more commercial property owners pay than homeowners for property of the same assessed value.
Currently, that ratio sits at 1.71 in Saskatoon, meaning non-residential property owners pay $1.71 in tax for every dollar paid by a residential owner on a similarly valued property. Under the existing split, homeowners will cover more than two-thirds of the $356.8 million in property tax the city collects this year, with businesses and other non-residential properties responsible for just under a third.
Coun. Randy Donauer, who requested the public engagement, said the issue resurfaces repeatedly during budget debates. “It’s not gonna be a fun conversation,” he said. “I suspect at the end of the day, neither side is going to be completely happy and council will be left with a tough decision.” City council last recalibrated the ratio after a reassessment increased residential property values and, with them, residential tax bills.
Keith Moen, executive director of the North Saskatoon Business Association, welcomed the review but cautioned against relying solely on an open survey to set policy, calling the likely results “fairly biased and predictable.” He argued that mid-sized cities like Saskatoon need lower commercial tax ratios to compete for business investment against larger centres that offer bigger workforces and amenities.
Wide Gaps Across the Country
Saskatoon’s ratio is relatively modest by national standards. City hall data cited alongside the survey shows Regina at 1.61 and Winnipeg at 1.44, both lower than Saskatoon, while several larger cities impose far heavier relative burdens on commercial property: Edmonton at 3.26, Surrey at 2.54, Vancouver at 3.53 and Calgary at 4.63.
A separate report from the Canadian Federation of Independent Business ranked Saskatoon second among 66 municipalities nationally for supporting small business growth, placing second for cost burden, fourth for regulatory burden and eighth for small business friendliness overall; Regina ranked 12th. Saskatoon’s history with the issue includes a failed 2023 push by then-councillor Mairin Loewen to shift more of the tax burden onto businesses, an effort council rejected. Jason Aebig, CEO of the Greater Saskatoon Chamber of Commerce, said his organization was still reviewing the new survey and not yet ready to comment.
Toronto’s Election-Year Tax Pledge
In Toronto, the property tax debate has taken a different shape, centred on the pace of annual increases rather than the residential-commercial split. Incumbent Mayor Olivia Chow, seeking re-election, has pledged to keep future property tax increases close to the rate of inflation, which Statistics Canada measured at three per cent in July.
The pledge follows a volatile few years for Toronto’s budget. Chow’s first budget in 2024 carried a 9.5 per cent property tax increase, the city’s highest in 25 years, followed by a 6.9 per cent increase in 2025 and a smaller 2.2 per cent increase in 2026. A spokesperson for Chow’s campaign, Shirven Rezvany, said the mayor inherited a $1.8 billion post-pandemic budget deficit and has since improved the city’s credit rating to AA+ while securing $15 billion from other governments for housing, transit and shelter funding.
Rival candidates have challenged the promise’s credibility. A spokesperson for Coun. Brad Bradford’s campaign, Joseph Colella, pointed to Chow’s earlier pledge of “modest” tax increases before the 9.5 per cent hike. Mayoral candidate and former MP Chris Alexander called the inflation pledge “performative,” arguing it amounts to an admission of past fiscal strain, and said he would freeze property taxes in his first year in office if elected, with an increase below inflation in year two.
Small Business Fallout in Atlantic Canada
The residential-commercial gap identified in Western Canadian cities is even more pronounced in Atlantic Canada, according to CFIB’s Atlantic Canada Commercial Property Tax Report, which examined 80 municipalities. It found commercial properties face municipal tax rates 146 per cent higher than residential properties of equal value in Nova Scotia, the largest gap of the four provinces, followed by 142 per cent in Prince Edward Island, 67 per cent in New Brunswick and 55 per cent in Newfoundland and Labrador. In Newfoundland and Labrador, once municipal business taxes tied to assessment are factored in, the effective multiplier rises from 1.55 to 3.20.
CFIB’s Atlantic director, Frédéric Gionet, said the disparity amounts to “a tax penalty on doing business,” noting two properties of equal value can face very different bills depending solely on use. The organization’s survey work found that among businesses with fewer than five employees, 31 per cent said property tax consumes more than 10 per cent of operating costs, and 40 per cent said the tax has significantly hurt profitability. Among firms reporting negative effects, 21 per cent delayed or cancelled an investment, 20 per cent delayed or cancelled an expansion, and 18 per cent cut staffing or hours. CFIB is calling on municipalities to reduce and eventually eliminate the higher commercial rate, arguing that a more even split could spread the same total tax levy more fairly rather than reducing municipal revenue.
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