While Mayor John Tory’s surprising move to support highway tolls has dominated the conversation at city hall over the last couple of weeks, there’s another piece of the mayor’s fiscal plan that demands your attention.

Tory has called for an end to the massive property tax break given to building owners who keep their units empty. I am very, very happy about this.

For me, it’s an issue that hits close to home. There’s a diner at the end of my street. It’s one of those classic greasy spoon places. A sign in the window advertises cheap beer and wings on Thursday nights.

But the diner, even though it’s part of a growing downtown neighbourhood, has been permanently closed for more than seven years.

This is frustrating for two reasons. First, I’m missing out on easy access to cheap beer and wings on Thursday nights. Second, because of existing city policy, it’s likely I am subsidizing that unused space -- paying to support the continued existence of an empty restaurant.

You’re probably paying too. For this diner and for the other perpetually and stubbornly unused retail spaces in your neighbourhood.


Under provincially-imposed regulations, Toronto’s property tax rebate program offers building owners a rebate on their property taxes if their units are unoccupied — commercial properties get 30%, while industrial properties get 35%.

There are conditions on the program, including the requirement that owners receiving the rebate show some attempt to rent the space, but there is no time limit on receiving the rebate.

Overall, it’s very generous to property owners – and represents a big revenue hit for the city.

city report released in 2014 indicated that since the vacancy rebate program was enacted in 2001 more than $367 million in subsidies had been given to property owners. About a third of all subsidies were given to property owners in the downtown core.

But the negatives of this program are about more than just the lost cash. It also incentivizes bad behaviour. If you’re lucky enough to own a building in a growing neighbourhood, the tax break makes it more appealing to avoid the hassle of tenants and sit on your property for a few years, letting the value appreciate.

At its worst, it prioritizes the financial concerns of building owners over the everyday needs of neighbourhoods.

Thankfully, the mayor is on it. After the provincial government indicated they would review the program, Tory announced in his speech to the Toronto Region Board of Trade that he would move to end it altogether.


Stacked up next to road tolls and transit plans, this might seem like a small thing. But for those of us frustrated with perpetually closed diners and boarded-up retail spaces, it’s no empty gesture. 

By: Matt Elliott Metro Published on Mon Dec 05 2016