TABIA Property Tax Update – 2026 Annual General Meeting
Submitted by Chris Rickett, Chair of the Tax Committee
Date: May 5th, 2025
Let me tell you about a time machine. Not the fun kind – no DeLorean, no flux capacitor. The Ontario property assessment system. Every year, Toronto sets its tax rates based on the values of properties in 2016. That’s not a rounding error. That’s a policy choice. And at this point, it’s less a time machine and more a time crime.
To put 2016 in perspective: that was the year the Leafs drafted Auston Matthews, and people genuinely thought things were turning around. We were wrong then, too, it turns out.
The reassessment scheduled for 2020 was cancelled due to COVID. Fair enough. But we are now six years past that cancellation, ten years past the last assessment, and the Province has yet to announce when – or whether – it plans to update property values across Ontario. In the meantime, the city keeps growing, the market keeps moving, and we keep dividing up the tax bill based on a snapshot of a city that no longer exists.
Here’s the structural problem. In the decade since 2016, residential and industrial property values have climbed dramatically. Warehouses are still worth their weight in gold. A detached home in a neighbourhood that used to be “up and coming” is now simply “out of reach.” But the tax system still treats those properties as though it’s 2016, which means they are quietly, systematically undertaxed relative to their actual value.
Commercial properties, particularly main street storefronts, haven’t seen the same appreciation. Which means they are quietly, systematically overtaxed.
A reassessment wouldn’t raise more money for the City. That’s the part people miss every single time this comes up. Total revenue stays the same. What changes is the distribution – who carries how much of the load. And right now, that distribution is out of date by a decade.
THE REASSESSMENT NOBODY WANTS TO DO
Here’s a question for the room: if fixing something is free, but people will still complain about it, do you fix it?
Queen’s Park has answered that question consistently for the past several years. The answer is no. You announce a review. You form a working group. You note the complexity of the issue. You move on.
Because reassessment, while revenue-neutral in aggregate, creates winners and losers at the property level. Properties that have appreciated faster than average see their share of the burden go up. Properties that haven’t seen it go down. And the people whose taxes go up – they vote, they call their MPP, and they are not shy about it. The people whose taxes go down tend not to throw a parade.
So the political incentive structure is perfectly designed to produce exactly what we’ve gotten: inaction.
What doesn’t get talked about enough is who absorbs the cost of that inaction. It isn’t spread evenly. It lands heaviest on commercial property owners and tenants, including our members, who have been cross-subsidizing undertaxed asset classes for the better part of a decade. Every year the Province delays, that imbalance compounds.
British Columbia, for what it’s worth, does annual assessments. Every year. The sky has not fallen. Property owners adapted. It became routine – like renewing a licence plate, except the province actually updates the number.
We’re not asking for the impossible. We’re asking for a system that reflects the city people are actually paying taxes in – not the city it was a decade ago.
THE SMALL BUSINESS TAX SUBCLASS: BUILDING ON THE WIN
Now let’s talk about something that has changed – and changed in our favour: the Small Business Property Tax Subclass. Last year, I called this a TABIA win. This year, I get to say, “We’re not done winning.”
You’ll recall the origin story. From day one, we were at the table. We pushed. We modelled. We debated definitions. We brought MPAC, the City, and the Province together with one thing in mind: keeping our main streets alive. The result was a subclass giving eligible properties a 15% reduction on the municipal portion of their property tax bill – the most significant structural reform for small businesses taxation in a generation.
Well. The 2026 City budget moved that number to 20%.
That’s right. Five more percentage points of relief, approved by City Council this past February, effective for the 2026 tax year. And the Province confirmed it will match the increase in the education portion. No new application required – it flows automatically on your bill.
We’re talking about roughly 28,000 small business properties across Toronto receiving deeper, ongoing savings. And critically, this wasn’t handed to us. This happened because we stayed at the table and pushed for the review the City committed to last year.
Is it perfect? No. Eligibility thresholds haven’t changed – too many strip malls, mixed-use buildings, and tenants still fall through the cracks. And yes, the landlord pass-through challenge hasn’t gone away. But a discount that’s grown from 15% to 20% in one year is a program that’s moving in the right direction. We’re not at the ceiling – provincial regulations allow up to 35% – and we intend to keep climbing.
This was never about a silver bullet. It’s about nudging a tax system that was never designed for vibrant, diverse, independent business districts – and making it fairer, one step at a time.
We put a dollar in the change machine. This time? We got two quarters back instead of one.
INTERIM USES: THE ANSWER TO A QUESTION THE TAX SYSTEM IS TRYING TO KILL
Now. The pickleball courts.
You’ve seen them. Hot pink, impossible to miss, sitting on the vacant development site at Yonge and St. Clair. That’s Fairgrounds – a free-to-join public racket club that transformed a dirt lot into one of the most-visited outdoor spaces in midtown Toronto last season.
Here’s what a vacant development site does for a neighbourhood: nothing. Worse than nothing, actually. It’s a gap in the street wall. It collects litter. It signals disinvestment. It tells people walking by that something was supposed to happen here, and didn’t. We know this. Anyone who has watched a main street slowly hollow out around a stalled construction site knows this intimately.
And with 28 condo projects cancelled and over 7,200 units removed from the pipeline last year alone, and another 20 projects on hold or in receivership, we are about to have many more vacant lots. The development economics that were supposed to fill these sites with mixed-use buildings have collapsed.
So what do you do with a hole in your neighbourhood while you wait for the market to recover?
You put something there. Something that activates the space. Draws foot traffic. Creates energy. Gives people a reason to walk down that block, stop in at the café next door, and browse the shop across the street. Interim uses – sports facilities, markets, pop-up programming – aren’t a consolation prize. They’re a genuine tool for keeping a street alive while the long-term plan sorts itself out.
Except here’s the problem. What is currently classified by MPAC as vacant residential land gets changed to a commercial tax class as soon as something starts happening. This more than doubles the property taxes. A vacant development lot being operated as a recreational facility isn’t being taxed like a vacant lot anymore. It’s being taxed like a commercial operation. And the resulting tax burden is making these interim uses economically unviable for their operators.
Think about what that means in practice. It means the choice isn’t between a pickleball court and a condo tower. The condo tower isn’t coming – not yet. The choice is between a pickleball court and an empty lot. And we are currently in a tax policy environment that picks the empty lot.
That is the wrong answer. We need MPAC, the Province and the City to recognize that interim uses on stalled development sites are a public good, not a commercial windfall, and to tax them accordingly.
This is a new fight. We’re in the early stages. But it’s one we intend to have.
IN CLOSING
So that’s your 2026 property tax update. The reassessment remains overdue and politically uncomfortable – nothing new there. The Small Business Subclass is delivering more relief than it was a year ago – genuinely new, and genuinely good. And a wave of cancelled development is creating a new kind of uncertainty for our BIAs that we need to get ahead of. As always: the work continues. The table is ours to sit at. And we intend to keep sitting there.