The commercial tax rate is the property tax rate applied to commercial properties (stores, offices, and other business uses), typically set separately from residential rates. In most Canadian municipalities, commercial properties pay higher tax rates than residential properties—the ratio varies but commercial rates are often 2-4 times residential rates. This differential reflects historical practice and the assumption that businesses can pass costs to customers. However, high commercial rates can discourage business investment and development. Municipal councils set tax rates annually, and decisions about the commercial-residential tax ratio generate significant debate about fairness, competitiveness, and economic development.