For the second year, Montreal’s commercial tax rate increased, despite most other Canadian cities lowering realty taxes to encourage growth.

According to the 2013 Property Tax Rate Analysis produced by Altus Group for the Real Property Association of Canada (REALpac), Montreal’s rates were well above those in the two other highest-rate cities, Vancouver and Toronto.

The report showed Montreal, Toronto and Vancouver’s commercial-to-residential tax ratios to be the highest, all in excess of 4:1. REALpac advocates for a ratio of about 2:1, maintaining that  the lower rate supports healthy economic growth.

Montreal’s commercial-to-residential tax ratio increased by 2.7 per cent year over year, reaching 4.40  in 2013, surpassing Vancouver at 4.35 and Toronto at 4.07.

According to the survey, Calgary and Edmonton saw the most significant year-over-year changes to their ratios, with 14 per cent and five per cent decreases respectively. Toronto, Halifax and Winnipeg also saw decreases, ranging from one per cent to 2.2 per cent. Among municipalities surveyed, the national ratio average is just above 3:1.

“The sustainability of our urban centres is vitally important. High realty taxes are a barrier to business growth and deter investment in downtown office, hotel, apartment and retail property development,” says Carolyn Lane, vice president of membership, marketing & communications at REALpac. “With so many shifts taking place in our global economy, Canadian cities need to be seen as competitive with other markets in the U.S. and around the world.”