Oct.22/05 Business Tax Debate Coming Next Week
Below is a short explanation from the Star of the item coming to Council next week on "Enhancing Toronto's Business Climate". This is a market-savy name for a staff report proposing to alleviate the tax inequities between tax classes within the city and between commercial classes between different cities throughout Ontario.
The report was presented to citizen's in September at an event promoted in this Blog. I was proud to hear that the majority of citizen's in attendance were from Ward 33 but overall numbers were still very small. And the context has changed somewhat as we are finalizing the item as citizen's receive whopping increases in assessment from MPAC. More input from you would be helpful.
The crux of the matter being that since the Property Tax reforms introduced by the former Provincial Government, Toronto Businesses and Multi-Residential dwellings have been paying a disproportionate percentage of the Property tax burden here in the city. Add to that, Toronto businesses, in particular, have been paying a disproportionate amount of the whole Province's education tax burden. This has brought about an exodus by businesses to the 905 district and a virtual stand still in commercial and light industrial start-ups inside our city limits. In Ward 33 we have witnessed it in our own Consumers Road Business Park.
There is nothing unusual about reviewing the structure of the reform at this point. It would be due for review right about now, whether the Provincial government had changed hands or not. The Toronto proposal attempts to get the review process going by moving on those things we have the jurisdiction to do ourselves. While it proposes a modest amount of the redistribution be gathered from the residential ratepayers, it also asks that the current Provincial Government review the education tax distribution throughout the province.
In the original reform, it was argued that Toronto should pay the lion's share of education tax as it had the lion's share of business growth and that 35 to 40% of the funds drawn from this community should be redistributed throughout the Province. Fair enough, but a decade later, the growth is in the 905's but they still pay below-average education portions within their property taxes. Simply put, if you are a business owner in Toronto, you are paying for the operations of a school in Uxbridge even though Uxbridge may be experience growth proportionately well beyond that of Toronto.
The landlord and tenant impacts are pretty well explained by Paul Maloney below. What isn't mentioned is the proposal's plan to apply special relief for small retail operations. This is crucial to our neighbouhood strip malls and small business areas. One only has to look at the struggle of Peanut Plaza to keep businesses leased to understand that over taxing is driving smaller operations under and driving anchor stores in these smaller plazas to close up and consolidate into super-stores that may be much further away from consumers.
This constant squeeze on small neighbourhood retail, directly contradicts the vision of both the City and the Province to invest in transit and pedestrian thoroughfares to make Toronto less car reliant. The final debate will take place in Council this week. It will no doubt be designated a timed item when we go through the agenda at 9:30 on Wednesday morning as session opens on Rogers Cable 10. After you read the article below, you can let me know what you think at councillor_carroll@toronto.ca.
Commercial break means $10 hike for homeowners
PAUL MOLONEYCITY HALL BUREAU
The owner of an average-value home in Toronto will have to pay an extra $10 a year in property taxes in a move the city says will help the economy.
By charging homeowners a bit more, the city can give commercial properties a break, in the hope of encouraging employers to stay rather than flee to lower-tax locations in the 905 suburbs.
The idea is to help turn around a trend that has seen the 905 pick up 800,000 jobs from 1991-2001, while Toronto lost 100,000 jobs.
It's reached the point where more Torontonians commute to jobs in Vaughan than the other way around, economic development manager Karen Thorne-Stone told a joint meeting of the policy and finance and economic development committees.
Over the past 10 years, only 13 of 91 new office buildings in the region have gone up in Toronto, Thorne-Stone said. High commercial taxes have been identified as a problem by city council as far back as 2000, but this is the first time any action has been taken.
"Speak to the people who do commercial realty in this city; they'll tell you it's a real issue," Mayor David Miller said.
"I think residents understand, and will understand, that if we don't take these actions and the employment base in Toronto doesn't grow, the tax burden on them in the future will be even more significant."
The tax rate charged on commercial properties is currently about 3.8 times the residential rate.
Under changes endorsed by the committees yesterday, the commercial rate will drop over 15 years to 2.5 times the residential rate.
Put another way, commercial classes (including highrise apartments) now pay 60 per cent of the $3 billion the city raises annually in property taxes, while the residential class (single-family homes and condos) pays 40 per cent.
When the shift is completed in 15 years, commercial will pay 45 per cent of the total and residential 55 per cent. The change is expected to be ratified by city council at its meeting next week.
Under the plan, the taxes on highrise apartments will drop about 2 per cent annually, or about $48 on an apartment renting for $1,000 a month. Currently, owners of highrise apartments pay 3.7 times the tax rate that homeowners pay.
That translates into about $200 on a $1,000-a-month apartment.
The high apartment rate has been a long-time complaint of both landlords and tenants.
"We are pleased that your staff has recognized the historic tax discrimination against tenants in the city," said Brad Butt, executive director of the Greater Toronto Apartment Association, representing landlords.
There is no good reason for rental apartments to be charged a higher rate than detached homes or condos, said Dan McIntyre, program co-ordinator for the Federation of Metro Tenants' Associations.
"In the 23 years I've been a tenant advocate, I've been challenging people to give me an argument why tenants should pay more taxes than homeowners," McIntyre said. "I haven't heard one yet. I'm still waiting."
Under provincial law, tenants must be notified when property taxes drop 2.5 per cent or more in a year.
The committees urged the provincial government to amend the Tenant Protection Act to ensure that all property-tax reductions are passed on to tenants.
The report was presented to citizen's in September at an event promoted in this Blog. I was proud to hear that the majority of citizen's in attendance were from Ward 33 but overall numbers were still very small. And the context has changed somewhat as we are finalizing the item as citizen's receive whopping increases in assessment from MPAC. More input from you would be helpful.
The crux of the matter being that since the Property Tax reforms introduced by the former Provincial Government, Toronto Businesses and Multi-Residential dwellings have been paying a disproportionate percentage of the Property tax burden here in the city. Add to that, Toronto businesses, in particular, have been paying a disproportionate amount of the whole Province's education tax burden. This has brought about an exodus by businesses to the 905 district and a virtual stand still in commercial and light industrial start-ups inside our city limits. In Ward 33 we have witnessed it in our own Consumers Road Business Park.
There is nothing unusual about reviewing the structure of the reform at this point. It would be due for review right about now, whether the Provincial government had changed hands or not. The Toronto proposal attempts to get the review process going by moving on those things we have the jurisdiction to do ourselves. While it proposes a modest amount of the redistribution be gathered from the residential ratepayers, it also asks that the current Provincial Government review the education tax distribution throughout the province.
In the original reform, it was argued that Toronto should pay the lion's share of education tax as it had the lion's share of business growth and that 35 to 40% of the funds drawn from this community should be redistributed throughout the Province. Fair enough, but a decade later, the growth is in the 905's but they still pay below-average education portions within their property taxes. Simply put, if you are a business owner in Toronto, you are paying for the operations of a school in Uxbridge even though Uxbridge may be experience growth proportionately well beyond that of Toronto.
The landlord and tenant impacts are pretty well explained by Paul Maloney below. What isn't mentioned is the proposal's plan to apply special relief for small retail operations. This is crucial to our neighbouhood strip malls and small business areas. One only has to look at the struggle of Peanut Plaza to keep businesses leased to understand that over taxing is driving smaller operations under and driving anchor stores in these smaller plazas to close up and consolidate into super-stores that may be much further away from consumers.
This constant squeeze on small neighbourhood retail, directly contradicts the vision of both the City and the Province to invest in transit and pedestrian thoroughfares to make Toronto less car reliant. The final debate will take place in Council this week. It will no doubt be designated a timed item when we go through the agenda at 9:30 on Wednesday morning as session opens on Rogers Cable 10. After you read the article below, you can let me know what you think at councillor_carroll@toronto.ca.
Commercial break means $10 hike for homeowners
PAUL MOLONEYCITY HALL BUREAU
The owner of an average-value home in Toronto will have to pay an extra $10 a year in property taxes in a move the city says will help the economy.
By charging homeowners a bit more, the city can give commercial properties a break, in the hope of encouraging employers to stay rather than flee to lower-tax locations in the 905 suburbs.
The idea is to help turn around a trend that has seen the 905 pick up 800,000 jobs from 1991-2001, while Toronto lost 100,000 jobs.
It's reached the point where more Torontonians commute to jobs in Vaughan than the other way around, economic development manager Karen Thorne-Stone told a joint meeting of the policy and finance and economic development committees.
Over the past 10 years, only 13 of 91 new office buildings in the region have gone up in Toronto, Thorne-Stone said. High commercial taxes have been identified as a problem by city council as far back as 2000, but this is the first time any action has been taken.
"Speak to the people who do commercial realty in this city; they'll tell you it's a real issue," Mayor David Miller said.
"I think residents understand, and will understand, that if we don't take these actions and the employment base in Toronto doesn't grow, the tax burden on them in the future will be even more significant."
The tax rate charged on commercial properties is currently about 3.8 times the residential rate.
Under changes endorsed by the committees yesterday, the commercial rate will drop over 15 years to 2.5 times the residential rate.
Put another way, commercial classes (including highrise apartments) now pay 60 per cent of the $3 billion the city raises annually in property taxes, while the residential class (single-family homes and condos) pays 40 per cent.
When the shift is completed in 15 years, commercial will pay 45 per cent of the total and residential 55 per cent. The change is expected to be ratified by city council at its meeting next week.
Under the plan, the taxes on highrise apartments will drop about 2 per cent annually, or about $48 on an apartment renting for $1,000 a month. Currently, owners of highrise apartments pay 3.7 times the tax rate that homeowners pay.
That translates into about $200 on a $1,000-a-month apartment.
The high apartment rate has been a long-time complaint of both landlords and tenants.
"We are pleased that your staff has recognized the historic tax discrimination against tenants in the city," said Brad Butt, executive director of the Greater Toronto Apartment Association, representing landlords.
There is no good reason for rental apartments to be charged a higher rate than detached homes or condos, said Dan McIntyre, program co-ordinator for the Federation of Metro Tenants' Associations.
"In the 23 years I've been a tenant advocate, I've been challenging people to give me an argument why tenants should pay more taxes than homeowners," McIntyre said. "I haven't heard one yet. I'm still waiting."
Under provincial law, tenants must be notified when property taxes drop 2.5 per cent or more in a year.
The committees urged the provincial government to amend the Tenant Protection Act to ensure that all property-tax reductions are passed on to tenants.
posted by Ward 33 @ 1:03 PM
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