Proposed billboard tax will have devastating impact on Toronto outdoor advertising industry



    
    Economic study shows new tax will be unfair burden on small businesses,
    advertisers and employees
    

    TORONTO, May 21 /CNW/ - The Out-of-Home Marketing Association of Canada
(OMAC) today released the results of an independent economic analysis of the
City of Toronto's proposed billboard tax, which shows the new tax will have a
devastating impact on the outdoor advertising industry. The proposed tax of
$16 million is a late addition to the City's development of a new harmonized
sign by-law. The suggested tax will amount to a 25% charge on all advertising
income earned from billboards.
    "It appears that the new billboard tax put forward by the City sign
by-law project team will be imposed in Toronto without proper consultation
with the industry and without a basic awareness of the industry's financial
fundamentals," said Rosanne Caron, President of OMAC. "This tax threatens the
survival of the outdoor advertising industry in the City which puts at risk
significant revenue earned by the City of Toronto and many small businesses
who receive income from our members."
    The study was conducted by Altus Group Economic Consulting to examine the
Toronto out-of-home advertising industry and analyze the economic consequences
of the proposed billboard tax brought forward on March 5, 2009 by the
Buildings Department of the City of Toronto at the Planning and Growth
Committee. The study indicates the following facts about the industry in 2008:
    
    - OMAC members earned $64.8 million in combined net revenue before
      operating costs
    - OMAC members will contribute $36.8 million in average annual revenue to
      the City through current agreements
    - OMAC members contributed $28.4 million in annual revenue to private
      property owners
    - OMAC members contributed $6 million in free space to over 95 charities
      and non-profits
    - OMAC members contributed $2.2 million in free space to promote City
      programs
    - OMAC members annual earnings before interest and taxes were $8 million
    

    The Altus study questioned why the sign by-law project team ignored
guidance from the Hemson Report commissioned by the City in 2007 which
proposed a maximum tax of $2.7 million per year on billboards to fund by-law
enforcement. The new proposed tax of $16 million is a dramatic increase for
which no explanation or rationale has been provided. The study also found the
new tax to be a threat to local charities that depend on outdoor marketing
companies for free public service advertising. Further, competitive media such
as street furniture and the TTC will be tax exempt creating another
disadvantage for billboard advertisers. "The tax rates being proposed by the
City Staff are discriminatory, generally confiscatory and lack any sense of
reality," said Dr. Frank Clayton, author of the study and a tax expert with
more than 40 years consulting experience.
    The outdoor advertising industry provides direct and indirect employment
to thousands of Toronto residents who would be impacted by a reduced or even
prohibited industry. The addition of a billboard tax to considerations of a
new harmonized sign by-law creates one more uncertainty for OMAC members who
were already concerned about the lack of clarity around numerous new
regulations which could impact outdoor advertising within the City.
    OMAC members represent 90% of the outdoor advertising revenue generated
in the City of Toronto which includes industry leaders such as Astral Media
Outdoor, CBS Outdoor, the Outdoor Broadcast Network, Pattison Outdoor and
Titan Outdoor.
    "We support the development of a new harmonized sign by-law," said Ms.
Caron. "The industry needs clear governance from the City to replace the
current patchwork of inconsistent rules and enforcement. We want to be a part
of the solution but so far we have been frustrated in our attempts to
participate in the process despite repeated efforts to provide relevant and
accurate information. Our fear is that regulations and a new tax will be
imposed on us without a full understanding of our industry and the negative
repercussions for the Toronto economy."
    To read the economic analysis conducted by Altus Group Economic
Consulting, visit:
    <a href="http://www.omaccanada.ca/en/aboutus/government_affairs/toronto-sign-bylaw/billboard-tax/Economic-Impact-Report/default.omac">http://www.omaccanada.ca/en/aboutus/government_affairs/toronto-sign-bylaw</a>
<a href="http://www.omaccanada.ca/en/aboutus/government_affairs/toronto-sign-bylaw/billboard-tax/Economic-Impact-Report/default.omac">/billboard-tax/Economic-Impact-Report/default.omac</a>
    To read OMAC's position on the City of Toronto's proposed harmonized sign
by-law and billboard tax, visit:
    http://www.omaccanada.ca/en/aboutus/government_affairs/default.omac

    About OMAC

    OMAC (www.omaccanada.ca) is responsible for promoting the benefits and
effectiveness of out-of-home media to advertisers and advertising agencies.
OMAC seeks to develop and implement new initiatives that serve as a resource
to the industry and increase understanding of out-of-home media.

    About Altus

    Altus Group is the leading multidisciplinary provider of independent real
estate consulting and professional advisory services worldwide. With a staff
of over 1,200, Altus Group has a national network of 34 offices in 24 cities
throughout Canada, 8 offices throughout the UK and 1 office in the U.S. We
operate as: Altus Research, Valuation and Advisory; Altus Cost Consulting;
Altus Realty Tax Consulting, Altus Geomatics; Altus InSite; Altus Edwin Hill;
Altus Andrews; Altus Geocom; and, Altus Capital Planning. Altus' clients
include banks, financial institutions, governments, pension funds, asset and
fund managers, developers and landlords and companies engaged in the oil and
gas industry.





For further information:

For further information: Alyssa Sotak, Optimum Public Relations, (416)
967-8114, alyssa.sotak@cossette.com; Rosanne Caron, President, OMAC, (416)
968-3435 ext. 108, rcaron@omaccanada.ca

Organization Profile

OUT-OF-HOME MARKETING ASSOCIATION OF CANADA (OMAC)

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