So you have opened a business in Downtown Kingston and you hear something about a special levy. A levy? You look it up and read: “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: BIA Boundary Map. 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 collected from property owners within the Business Improvement Area (BIA) whose buildings are zoned for commercial or industrial use. Each year, the levy is determined by the BIA Board of Management and then submitted to the municipal council for final approval. Property owners have the option to either absorb the levy as a management expense or pass it on to their commercial or industrial tenants as part of their lease agreements. The funds generated by the BIA levy support various initiatives aimed at fostering economic growth, improving public spaces, and promoting local businesses within the downtown area.

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.

Reference: https://www.toronto-bia.com/about-tabia/history/

Downtown Kingston Levy

The Downtown Kingston BIA levy serves as the primary funding source for the BIA's budget. Additional financial support comes from sponsorships and grants, which, in combination with the levy, help finance various BIA initiatives. These initiatives include events, marketing efforts, seasonal decor, street furniture, maintenance of street cleanliness, wayfinding signage, and safety and security measures. Moreover, advocacy for the betterment of the downtown community and staff wages are also covered within the final budget. The overarching goal is to ensure the BIA has the necessary resources to foster a vibrant, prosperous, and welcoming environment in downtown Kingston.

Annual levy increases:

Several factors contribute to the annual decision on BIA levy increases. These may include the introduction of new staff, departments, events, or additional responsibilities. To account for the rising cost of living, a standard practice is to raise the levy by 2.5% annually. However, many BIAs in Ontario, including Downtown Kingston BIA, opted not to increase their levy in 2020 due to the unprecedented challenges posed by the COVID-19 pandemic. In some years, a more substantial levy increase may be recommended, depending on the scope and scale of planned initiatives for that year. These decisions are carefully considered to ensure that the BIA can continue to support and enhance the downtown community effectively.

For business owners, an increase in expenses can be a significant concern. However, when considering the BIA levy, a modest 2.5% increase spread across all businesses results in only a slight incremental increase per business. This incremental increase is reinvested into the local community, contributing to a better overall downtown experience for residents, visitors, and businesses alike. Therefore, while it's understandable that business owners are mindful of their expenses, the BIA levy represents a collective effort to ensure the continued growth and prosperity of the downtown area.

What a 4% increase in 2023 means for a commercial property assessed at 1 million dollars:

• 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.