March 29, 2007

In last week's budget (March 22, 2007) from the Ontario Legislature, the government tabled proposals for changing the assessment system and tax rates in relation to how property taxes should be determined and distributed. After careful evaluation of the document we can find very little there for the taxpayers. Once again our politicians and bureaucrats at Queen's Park have failed to respond to the wishes of the electorate.

Business education taxes (BET) will be lowered over the next seven years to be fair across the province and enhance their competitive capabilities. What does this mean to the residential property owner?

In the final analysis this translates into a 1.29 billion dollar tax shift onto the shoulders of the residential property taxpayers over the seven years. Sixty nine percent of that increase will occur in the last two years alone after the changes have become well entrenched.

Property taxes come from two sources, residential and business. There is no other source!

We notice that the BET will be phased in slowly (under the radar) over the seven year period. Is this being done in hopes that residential property owners will not notice the increase in their taxes?

Property taxes should be fair, transparent and predictable. Under the present system of Current (Market) Value Assessment (CVA), they are unfair, confusing and constantly rising.

Public pressure has made the government make one small admission of being wrong. The proposed annual assessments will come at the cost of stability and predictability.

The provincial government built in a mechanism whereby municipalities can avoid tax shifts between property tax classes. In doing so they have sidestepped their responsibility and landed the local levels of government with an administrative nightmare. This process pits one group of ratepayers against another.

The budget states that local municipalities are required to offer relief from reassessment-related tax increases. What it doesn't say is that any tax relief offered is recorded as a lien against the ratepayer's property and will be collected with interest when the property sells.

The proposed four-year phase-in of increases combined with a four-year reassessment cycle creates further confusion and is designed to distract attention from the reality of the taxation plan.

The phasing in of increases over several years was originally the "carrot" offered to municipalities in the past; before it became mandatory to use market value assessment as dictated by the province.  And the four-year reassessments are a tacit admission that annual reassessments are not practical; the Municipal Property Assessment Corporation (MPAC) just doesn't have the staff to do it, and it's also impractical.

If a property owner is hit with a 20 to 60 % increase with the new assessments, it will be spread over four years at 5 to 15% increase per year, but the net effect will compound the costs. This is a blatant attempt to make the taxpayer think that it will be easier to pay taxes. However, is this fair?  When was the last time people on fixed incomes or retirees had even so much as a 2% increase in their net income?

The net result will be people being forced by the provincial government to sell and move to less desirable accommodations.

The government will consult with municipalities and MPAC on the changes, but not the public. There is no mention of really fixing the problems that current value assessment and MPAC have created.

Finally, the government is formalizing the appeal process which previously was carried out on an informal basis. In total, the document is nothing more than smoke screens and a rehash of old ideas -- A do-nothing document!

Fairness to taxpayers requires new thinking and a new approach, which are completely lacking in this document. The government gets a failing grade, the results of which should come forward in the fall provincial election. They have totally ignored the concerns of the taxpayers of this province.

More information, from the Canadian National Taxpayers Coalition (CNTC), on assessment and property taxation in the ONTARIO BUDGET 2007 can be found at www.cntccanada.ca.

 

   
Paul Hazell,                                                     
President / CEO                                                          
CNTC / CAFTA              

Links to documentation:

Overview of the Ontario 2007 Budget (Assessment) click here

Download a copy of the Ontario 2007 Budget - section regarding assessment reform??? click here

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