Lionel Miskin: Chair
I’m here to talk about property tax and to talk about fairness. It’s appropriate to talk about fairness because the 2015 provincial budget speech uses the word “fair” not less than six times.
As I have previously reported, a large part of your property tax bill, whether commercial or residential, is a provincial government tax collected by the municipality for the province. The government calls it an education tax although the money goes into general government revenues. Also as previously reported, the province sets the rate for commercial property in every municipality in the province, but rather than setting one rate for the entire province, it sets different rates in different municipalities. How fair is that? TABIA has been advocating a uniform rate for years, and although the government has promised to rectify the situation a number of times, that has just turned out to be a typical political promise. The tax has been described by tax experts as “arguably the most inequitable provincial tax in Canada.” So much for fairness.
But the budget document contains another ominous section. You can check it out for yourself because the budget material is on line, just type in “Ontario budget 2015” and you’ll get it. Look at the section titled Strengthening the Property Assessment System, and you’ll find these statements:
“The Province, in partnership with MPAC, municipalities and stakeholders, is working to improve the Property Assessment System in time for the next province-wide reassessment in 2016. The key focus of this work is the implementation of the Special Purpose Business Property Assessment Review report recommendations. The objectives of the assessment review recommendations are to improve the transparency, accuracy and predictability of the property assessment system. The Province is proposing changes that would support these objectives by helping to resolve disputes about assessed values before the return of the assessment roll.”
What does this mean? We’ll see, but to me it signifies that if you have enough heft, if you are influential enough, if you are big enough, you will be able to negotiate your own assessment directly with MPAC. And what goes on in those negotiations will be shielded from the public eye by legislation purporting to protect privacy. As per the following sentence: “The Province is proposing to strengthen protections for commercial property information shared by taxpayers with MPAC as part of the valuation process.” Furthermore, you will not be able to ascertain even the reduction in assessed value which has been negotiated behind closed doors because it will all be concluded before return of the assessment rolls i.e. before the assessment numbers have been released to the public. So much for transparency.
For years TABIA has been advocating with government to assess property on its value as currently used, not on the highest and best use. For example assess a clothing store as a clothing store, not at a value that some developer might pay for it, i.e. not on the basis of some future value for development purposes. That plea has fallen on deaf ears, but now the government appears to be proposing to do just that for a chosen few. How fair is that?
So it would appear that “current use assessment” in govt terminology is “special purpose assessment”, just as an increase in taxation is called revenue enhancement. But the proposal really highlights the basic flaw in the current system. It does not and cannot work fairly, and here is the government’s ingenuous confession that this is so.
But it’s not all doom and gloom. New Mayor, John Tory. I and JK met with him during the mayoralty campaign, then TABIA’s full executive met with him in his office a few weeks ago, and he generously attended and spoke at a TABIA breakfast meeting which many of you attended. He has been very straight-forward with us, being clear about what policies he would support and what he wouldn’t, quite refreshing I must say to meet with a politician who does not dissimulate. He is in full agreement that some kind of relief or compensation should be provided to those businesses which are adversely affected by construction; think St. Clair, think Eglinton etc. And he has indicated that he exploring options for that. He is also open to further continuing the tax rate ratio reduction. You will remember that when your tax committee first became involved, businesses in Toronto were paying property tax at a rate which was more than five times the residential. Thanks to the former Mayor David Miller, and thanks to TABIA’s persistent efforts, a program was introduced to bring that ratio down to 2.5 to 1 which is where we are now, and thanks to those councillors who saw the wisdom of maintaining that program. Mayor Tory is open to the possibility of continuing that process until the ratio reaches 2:00 to 1. Keep your fingers crossed. What the mayor is not prepared to do is to press Queens Park to implement a levelling out of the provincial property tax which heavily penalizes Toronto businesses in relation to those in surrounding municipalities. So that is a battle which we will continue to fight on our own.