From Saskatoon’s city hall to Toronto’s mayoral campaign trail, Canadian municipalities are grappling with a familiar but unresolved question: how much of the property tax bill should fall on homeowners versus businesses, and how fast can either group’s bill be allowed to rise. New surveys, industry reports and election promises this fall are putting the issue back in the spotlight.
Saskatoon Reopens the Business-Residential Split
Saskatoon city hall is preparing to ask residents directly, through an online survey launching in October, how they think the property tax burden should be divided between homeowners and commercial property owners. Under the city’s current ratio of 1.71, the owner of a business property pays $1.71 in tax for every dollar paid by a homeowner with a property of equal assessed value. That split means homeowners are on the hook for more than two-thirds of the $356.8 million the city collects in property tax this year, while non-residential properties cover just under a third.
Coun. Randy Donauer, who pushed for the public engagement, acknowledged the debate won’t produce consensus. “It’s not gonna be a fun conversation,” he said, adding that “neither side is going to be completely happy and council will be left with a tough decision.” The ratio has resurfaced repeatedly during budget talks, including a 2023 attempt by former councillor Mairin Loewen to shift more of the burden onto businesses, which was voted down.
Saskatoon’s ratio is on the lower end among Western Canadian cities. Regina sits at 1.61 and Winnipeg at 1.44, while several larger cities lean much more heavily on commercial taxpayers: Edmonton’s ratio is 3.26, Vancouver’s is 3.53, Surrey’s is 2.54, and Calgary’s is 4.63. Keith Moen, executive director of the North Saskatoon Business Association, said cities like Saskatoon need a lower commercial rate to compete for business investment because they lack the amenities and workforce advantages of bigger centres. He welcomed the review but cautioned against relying solely on an open survey to set policy, warning it could produce “fairly biased and predictable results.” A separate ranking by the Canadian Federation of Independent Business placed Saskatoon second among 66 municipalities nationally for supporting small business growth, ahead of Regina at 12th.
Atlantic Canada’s Commercial Tax Premium
The residential-commercial gap is even starker in Atlantic Canada, according to a new Commercial Property Tax Report from the Canadian Federation of Independent Business covering 80 municipalities across the four provinces. The report found commercial properties face higher municipal tax rates than equally valued residential properties in nearly every municipality studied. The gap is largest in Nova Scotia, where commercial properties are taxed at rates 146 per cent higher than residential ones, followed by Prince Edward Island at 142 per cent, New Brunswick at 67 per cent and Newfoundland and Labrador at 55 per cent. In Newfoundland and Labrador, once municipal business taxes tied to assessment are factored in, the effective tax multiplier rises from 1.55 to 3.20.
Frédéric Gionet, CFIB’s Atlantic director, said the disparity amounts to “a tax penalty on doing business,” noting two properties of identical value using similar municipal services can face very different bills simply because one is used commercially. The CFIB’s survey work found the strain falls hardest on the smallest operators: among businesses with fewer than five employees, 31 per cent said property tax eats up more than 10 per cent of operating costs, and 40 per cent said it has significantly hurt profitability. Among firms reporting a negative impact, 21 per cent delayed or cancelled an investment, 20 per cent delayed or cancelled an expansion, and 18 per cent cut staffing or hours. Gionet said property tax bills don’t flex with a business’s performance: “The bill arrives anyway.” CFIB is calling on municipalities to reduce and eventually eliminate the higher commercial rates, and for provinces to ensure their own tax policies don’t compound the imbalance, arguing revenue can still be preserved by spreading the same levy more evenly across the assessment base.
Toronto’s Election-Year Tax Pledge
While Saskatoon and Atlantic Canada debate who should pay more, Toronto’s municipal election has turned property tax into a campaign issue focused on the overall rate of increase. Incumbent Mayor Olivia Chow has pledged to keep future property tax hikes near the rate of inflation, which Statistics Canada measured at three per cent in July. Chow’s 2026 budget included a 2.2 per cent increase, her smallest since taking office in 2023, following a 9.5 per cent increase in 2024 — the highest in 25 years — and a 6.9 per cent increase in 2025.
Chow’s campaign says she inherited a $1.8-billion post-pandemic budget deficit and has since improved the city’s credit rating to AA+ for the first time in 25 years, alongside securing $15 billion from other governments for housing, transit and infrastructure. Rival candidate Brad Bradford’s team said voters “shouldn’t trust” the inflation pledge, pointing to Chow’s past promise of “modest” increases. Candidate Chris Alexander called the pledge “performative” and instead promised to freeze property taxes in his first year in office if elected, with increases below inflation in year two.
This article references reporting from:
