February 10, 2008
Mr. James:

            I am writing to you at this time in response to your Toronto Star column entitled, “Don’t Raise the Roof over Taxes”. Your column deals with the issues of rising property taxes in 2008/9 for the City of Toronto.
            I represent the Canadian National Taxpayers Coalition (CNTC) one of the “media advocates or opinion leaders” as you describe them in your column. We have a large number of supporters and members that totally disagree with your position in your column. We have been working for 4 years on this issue representing people all over Ontario. Property taxes are not just a Toronto issue. Anyone who lives in Durham or York region will tell you they pay much more in property taxes than a similar home in Toronto. Throughout the rest of Ontario you will hear similar comments for a large number of reasons (i.e. larger properties, prime properties, and smaller populations). The push for higher taxes in downtown Toronto versus the suburbs is an old argument.
            Property taxes are based on “economies of scale”, or at least they should be, but that changed when the provincial government began seriously downloading costs to municipalities. This was begun during the Harris government, with successive governments finding it “convenient” to continue the process. Simply put, more people and businesses produce more taxes. Toronto is rich with both. Small towns in southern Ontario have neither and must bear the full cost of municipal services and the downloaded costs. Consequently significant increases in property taxes are forthcoming.
            You also didn’t mention the “tax shift”. The Municipal Property Assessment Corporation, (MPAC), believes that certain properties in Ontario are better than others. For example, waterfront property, water view property, or properties near conservation areas or ravines are considered “choice”. The result is a tax shift of up to 20% extra assessment on the property, even though these homes may be the same as others, relatively similar homes in other less desirable areas. There are many more of these types of properties in rural Ontario than in Toronto.
            As I have now explained, rural properties in particular are receiving assessments, with an extra tax shift if the property is considered “choice”. This coupled with the downloaded costs from the provincial government and lower economies of scale increases the per capita rural taxes at a higher rate than in urban areas. Even though the rules are similar for Toronto, there are many, many more people to pay for it!
            You say not to worry if we get as much as a “20% increase in value of our property. If your property has gone up less than 20% you will get a cut.” You also say that only” two factors influence a homeowner’s tax bill; the house’s value and how much money the city needs to deliver services.”
            According to Mr. McGuinty, assessment is a ratepayer’s share of the costs. The city’s services are only a small part of the costs. How about the tax shifts?  How about the downloaded costs based on limited economies of scale? The government sees the Assessment System as a ‘Funding Stream” that municipalities can tap into in order to raise funds. Unfortunately, all of the extra costs are making the tax burden overwhelming. The stream is drying up!
            Certainly, the number of dollars paid by a ratepayer is calculated by multiplying their assessment by the tax rate established by the municipality (to cover costs). The costs are getting so high, particularly from the downloading, that ratepayers just can’t afford it. Do you know that things like “court costs, conservation areas, the drug benefits for those over 65 years of age, social housing, welfare and many more have been downloaded to each municipality? Policies have also been established by the Province when it comes to infrastructure improvements like sewers, drinking water facilities, and roads. Each municipality must pay the entire cost subject to grant or discounted loan applications that may or may not be approved. 
            Take for example: if you build one kilometre of highway it may cost $1 000 000. In a city like Ottawa, London or Toronto there are a large number of people to pay for it. In small towns, there are very few people, so the costs per person are much higher. Other essential services and infrastructures are paid for under exactly the same method. Is this fair? In one town in Ontario, their water bills are $700.00 a month!
            Based on your calculations, (20% increase), I actually took my assessment notice and tax bill and did the calculations. Even if I left the tax rates the same (and I expect Mr. Miller to increase it), my number of dollars to be paid, would increase by 16%! I can’t remember how long ago it was that I received such an increase! Did you do the similar calculation on your property before you said 20% would have no effect on costs? I question how I will be able to afford this increase from my pension!
            You talked about the “tax freeze”. It wasn’t really a freeze but rather a postponement. MPAC has continued to do all the calculations over the 3 years. We will just get it all at once; however, Mr. McGuinty has offered to phase in the increases over 4 years. He realized the “mess” that MPAC was in and ordered the changes as cited by Mr. Marin. Our organization has thousands of examples of inaccurate assessments that MPAC insisted were correct. Many were appealed—about 70 000 one year. Doesn’t that seem rather large? Could MPAC be doing something wrong?
            It is not Mr. Marin’s job to suggest alternate assessment methods. That must come from our legislators, like Mr. McGuinty. Please don’t use that reason to imply that there is no other system! There is a better system that could be used called, the ‘Cost Approach”. It could be implemented using the data from MPAC records, in about 3 weeks. Assessment could even be a part of the tax dollars calculation, but not the only method.
            Your article says that other organizations are advocating a complete change in the assessment system. “Their agenda is to totally change the property tax system so that the high priced downtown properties pay a lot less while those in the suburbs pay more”. Your comments could not be further from the truth. If you really took the time to learn about appraisals using the system we are advocating you would realize that everyone “including the high priced downtown properties” would be paying their fair share of the taxes.
            You have said that organizations like ours asked for the freeze and now are not willing to pony up. Well sir, let me tell you that “we are ponying up”. The freeze was asked for to give everyone (including the dysfunctional provincial government) some breathing space, give politicians time to “think” about how destructive this system of taxation really is, and of course give the lowly taxpayer a break. When does government ever do that for the taxpayer?
            Many other parts of Canada have solutions like in Nova Scotia. Assessments are capped at the rate of inflation.  A large number of states from the United States are rebelling against Market Value (Current Value) assessments. The Provincial Government needs to take back (upload) many of the previously downloaded costs to municipalities. Just ask any Mayor what the problems are with property taxation! Downloading will be stated! Only about 50% of a ratepayer’s tax dollars pays for municipal services. The rest goes to downloading!
            Property taxation is a huge issue with many dimensions. If something doesn’t change in the near future, the public ratepayers will be bankrupt. Houses will be vacant and only the rich will be able to own property. At the same time, our provincial and federal governments sit back and proclaim large surpluses, in the billions!
Could it be that these governments are not paying the bills?
            Isn’t it about time that all the stakeholders, involved in the property taxation issue, meet and look for an affordable and fair method? Our members would gladly show leadership in this area at any time. If nothing happens, we’d better find a room somewhere, because that’s all we are going to be able to afford!

                                                                                                                                                                        Dave Barnett,
            Corporate Secretary, CNTC/CAFTA