Archived columns and blog posts by Matt Elliott

It's time Toronto started giving a tax break to businesses blocked by construction

By: Metro Published on Mon Nov 17 2014

The upside of new transit construction seems pretty darned obvious. It means that people in the area will get new and improved transit — eventually.

But the downside of new transit construction is clear, too. New transit construction — whether it’s subway or LRT — means roads get ripped up. It means access to local businesses gets restricted to customers who arrive by foot, bike or car.

It means several years of digging, and several years of chaos.

Current Toronto transit projects such as the Eglinton Crosstown LRT and the Spadina subway extension are good examples.

In both places, streets have been replaced by cavernous holes. Local businesses affected have reported a drop in customers.

It’s gotten so bad that last week, the executive director of the Eglinton Way BIA told Global News that its members may soon start asking for some kind of monetary compensation to offset lost business.

Compensation for businesses affected by construction is one of those issues that comes up a lot. On a moral level, it’s hard to argue against the notion. Businesses are suffering through no fault of their own. Why shouldn’t governments bear some responsibility for helping them weather the storm?

But, of course, money isn’t infinite. Just because something might be the right thing to do doesn’t necessarily mean it’s affordable. Governments barely have the cash to build new transit projects in the first place.

But there just might be a solution that could provide some compensation to businesses without breaking the bank.

There’s a little-known program in effect across Ontario that provides property tax rebates to owners of commercial and industrial properties. If you happen to own a building that is vacant for more than 90 days, you can get a rebate on your property tax bill of at least 30 per cent.

It’s not a cheap program. Between 2001 and 2013, the municipal and provincial governments gave out more than $366-million in rebates to Toronto property owners.

But when businesses suffer due to construction, the program turns things backward. In effect, building owners along construction routes such as Eglinton are eligible for a tax rebate, but only after their tenants have seen their businesses fail.

With some rejigging by the provincial government and support from Toronto City Hall, the program could instead help businesses avoid failing in the first place.

Commercial properties in construction zones could be made eligible for the rebate before they become vacant, which would translate into a temporary reduction in rents for tenants.

This post was originally published at on 2014-11-17T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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