Education tax change will save London businesses $22M annually

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Ontario is tweaking its education tax rate for businesses, smoothing out an uneven rate across the province, a move expected to save commercial taxpayers $22 million a year in London.

City politicians and Mayor Ed Holder have been lobbying for the change for years — education taxes are collected by city hall through property taxes — to bring London’s rates in line with what’s paid by businesses elsewhere.

“We really emphasized the fairness piece, as well as the timing piece. This is a great time for the province to make this change, because it provides financial relief to businesses at a time they really need it,” city council’s budget chair Josh Morgan said.

“This is really important for London businesses because they have been paying a higher rate than some other parts of the province for almost a decade.”

The provincial government announced in Thursday’s budget a lowered business education tax rate, 0.88 per cent across Ontario. Right now, London businesses, and those across the region, pay 1.25 per cent. The change will amount to a 10.5 per cent reduction in property taxes for the majority of commercial and industrial property owners in London, Holder said in a statement.

“This will provide much-needed relief to hundreds of London businesses as they recover from the impacts of the COVID-19 pandemic,” Holder said, noting it was a priority raised by a task force he launched to address London’s economic recovery in light of the pandemic. 

The reduction in provincial education taxes for businesses also will be applied across Southwestern Ontario, including Windsor and Grey, Essex, Lambton and Oxford counties. But the province stressed the change won’t shrink education funding, pledging to “adjust payments to school boards to offset the reduction in education property taxes.”

“I think the changes we’re making to the supports in tax reductions for the business community are really going to give London a chance to excel during COVID-19, make sure the businesses are maintained, and open up opportunity for further development,” said PC MPP Jeff Yurek, who represents parts of Elgin, Middlesex and London.