TABIA AGM Tax Report
Mr. Lionel Miskin, TABIA Vice President & Chair of Tax Committee.
December 07, 2020.
Those of you who heard my report last year heard me say “nothing has changed”. Well, until the 2020 provincial budget was released, I could have said the same thing again this year. Lots of talk about preserving main street, mostly lip service but no action. Someone named Brooks Atkinson wrote: “The perfect bureaucrat everywhere is the person who manages to make no decisions and escape all responsibility.” We’ve certainly seen that.
For many months now TABIA has been engaged in discussions with certain representatives of MPAC and the City’s revenue department with, of course, the aim of achieving meaningful tax reform. Various options were put on the table and discussed. The group reduced the number of viable options to two, and the City agreed to submit them to computer modelling to determine what effect they might have on city revenues, main street, and other taxpayers. This is still a work in progress.
At the same time, the MOF has sponsored a series of consultation meetings with what has come to be called “stakeholders”, again with the aim of exploring possible tax changes. There was no hint of what the Ministry had in mind, and we know that any sufficiently advanced bureaucracy is indistinguishable from molasses. We also know that, as someone named Laurence J. Peter said: Bureaucracy defends the status quo long past the time when the quo has lost its status”. That might explain why nothing has changed.
Nevertheless, COVID-19 has substantially increased awareness of the dire predicament of main street and appears now to have driven the province to enact some changes which have the potential to prove beneficial.
The 2020 Provincial Budget has been released. Perhaps this is where the Ministry consultation meetings have led to. Based on statements in that document and on statutory and regulatory amendments now being enacted to implement the budget provisions, it would appear that the Province is dumping much of the tax issue back onto the municipalities. To be more explicit, the province is intending to authorize municipalities to establish commercial sub-classes for small businesses, together with the authority to reduce the standard commercial tax rate for those sub-classes by as much as 35%. As added incentive the Province will also consider matching these municipal property tax reductions in order to provide further support to small businesses. While that may be intended as added incentive, it may also encourage municipalities to reduce its rate reduction, knowing that the province will be making a contribution too. In TABIA’s view, if there is to me a maximum to the permitted reduction, for municipalities taking advantage of the authorization, there should also be a minimum. In other words, any reduction should be at least a meaningful percentage.