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The Levy Explained

So you have opened a business in Downtown Kingston and you hear something about a special levy. A levy? You look it up and says: an act of levying a tax, fee, or fine. Oh no! Do I have to pay this? Will I receive a bill? Is that why the Downtown Kingston BIA is wanting to ‘get to know me’?

It’s true. We do want to get to know you so that you can be fully knowledgeable on how the BIA helps downtown businesses. It’s also true that there is a special levy on commercial and industrial properties within the Downtown Kingston BIA boundaries: In this blog we will explain what the levy is and how it effects your business. 

What is a levy?

The Downtown Kingston BIA levy is a sum of money that is taken from property owners that have buildings that are zoned commercial or industrial, based on their property assessment, over and above their property taxes each year. Property owners can choose to absorb the levy as an expense of property management or choose to bill it through to their commercial/industrial tenants as a part of their lease agreement. Either way, the levy is something that is charged annually. The amount of the levy is decided by the BIA Board of Management, usually with a detailed recommendation presented by the BIA staff. If approved by the Board, ultimately then goes to municipal council for final approval.

Why is there a BIA?

The concept of Business Improvement Areas (BIAs) first originated in 1970 with a group of business owners in the Bloor-Jane area of west Toronto. These business owners were concerned about the decline of their main street caused by the growing popularity of shopping malls, and an extended subway system, both of which were drawing shoppers away from their traditional retail area.

Under the Provincial legislation (Section 217 of the Municipal act, RSO 1980, suspended by section 220, RSO 1990) this group of business owners created a self-help program. The legislation empowered the BIA’s members to pool and use their own money to promote their main street and to make several physical improvements to the area such as banners, flowers, etc in order to bring customers back to Bloor Street West. This not only benefited the local businesses, but also the entire neighbourhood.

The success of the first BIA, Bloor West Village, inspired other retail districts to follow this model and become BIAs themselves; such as, Bloor-Yorkville, The Kingsway, etc. Today, there are 85 BIAs in the City of Toronto, and over 300 across the Province of Ontario. The BIA concept has been emulated throughout Canada, the United States and across the globe.


Downtown Kingston Levy

In the case of Downtown Kingston, the levy is the foundation of the BIA budget. The remainder of funds needed to run the BIA come from sponsorships and grants. A combination of the levy and other revenue sources help to fund BIA initiatives like events, marketing, holiday and summer decor, street furniture, street cleanliness, way-finding and safety and security, to name a few. Advocacy for the best interests of the downtown community and staff wages also are covered in the final budget with the goal being to fulfill the BIA’s mission and purpose:

Mission: To cultivate and enhance downtown Kingston’s position as the region’s leading culinary, entertainment, shopping and services destination, while attracting more people to experience and contribute to our vibrant downtown community.

Purpose: Foster an environment in which businesses can find success.

Annual levy increases:

Things like the introduction of new staff, departments, events or responsibilities are often taken into consideration when deciding on levy increases each year. It is standard practise to raise the levy annually by 2.5% to account for cost of living. Many BIA’s in Ontario, including Downtown Kingston BIA did not raise their levy during 2020 due to the devastating effects of COVID-19. In October 2022 a 4% increase to the downtown Kingston levy for 2023 was recommended, and approved by the Board. This was presented to the general membership at the AGM in November and will go before Council for final approval.

As a business owner, 4% seems like a big deal! But when you put it the context of the levy, 4% is an incremental increase, for the betterment of the overall downtown experience.

To demonstrate what a 4% increase means on the levy of a commercial property assessed at 1 million dollars see below:

  • Property Assessed at $1,000,000
  • 2022 Levy = .00331735% of assessed property value
  • 2023 4% increase = .00345004 of assessed property value
  • Annual Levy increase on a million dollar assessed property will be approximately $132, or $11/month.

To further put things into perspective here are a few facts to ponder:

  • 53% of the buildings in downtown Kingston are currently assessed at between 300K and 1.5 Million.
  • Approximately 25% of the levy is paid for by 8 larger properties
  • Approximately 80% of the levy is paid for by 132 properties 

If you have questions about the levy and how it affects your business, reach out to the office at 613-542-8677 and ask for Marijo.