Steady as she goes and the impact of MPAC

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by Jim Bertram

About a week ago, Council announced tax rates following the recently completed budget process for 2019. At that time, the following tax information was offered:

  1. The school board tax rate declined by 5.29%. Yes, I said it declined. This rate is set by the provincial government itself and transmitted to the local authorities. All residential properties in Ontario are subject to the same education tax rate, per Ontario Regulation 400/98: www.ontario.ca/page/property-tax#education_tax. However, the funding requirements by schools, and the extent that this education rate addresses these needs, is not something explicitly shared with the municipality. This marks the first time I have seen an actual decline in a tax rate!
  2. The Leeds-Grenville County tax rate was neither increased nor decreased – it was expressed as a rate “increase” of “zero” per cent. At present, I have no details as to how this result was obtained, but am sure that Mayor Peckford could give us an explanation, given her position as member of the County Council. Something to look forward to.
  3. The North Grenville municipal tax rate increase was 1.5 percent. I am pleased at this result for 2019. However, the increase could have been very close to zero, had Council been less “generous” with the grants which it awarded in the Community Grant part of the budget.

The above rates will be melded together to give a final and complete tax rate, which will be combined with the MPAC rate for your property to form the composite, which is your final tax bill. Good news in terms of tax rates from the agencies mentioned above.

However, given the upward movement in local real estate market values more recently, we may expect sharp increases in our tax bills in future, given the role of MPAC in establishing our municipal tax bill. Remember: MPAC’s calculations are based on an appraisal of your property’s market value. When that goes up, so does the MPAC rate. Even with a modest future rate increase approach by the three agencies listed above, their revenues will be increasing considerably, thanks to the MPAC effect. That’s the “less good” news. It means that, notwithstanding the trend in rates shown above, all residents will pay more because of MPAC. But those who have valuable property and relatively low cash income will be relatively more and more under stress from municipal tax bills, since taxes are paid from disposable income. If you don’t have much of that, well, you will be more and more hard pressed. A growing problem!

My personal feeling is that the role of MPAC must be modified to eliminate its more negative effects on residents who own property, in particular, its effects on lower income taxpayers. You know – the question of “Affordable Housing” is part of this discussion. And, as it happens, the provincial government is responsible for the organisation of, and legislation surrounding, our property tax system. It’s time for some reform of the impact of MPAC. Mr. Ford – are you willing to take this reform on? I hope so.

1 COMMENT

  1. Right on Mr Bertram. As a senior on a fixed income our limited resources are being put to the test and in some cases, more and more each year, extremely tested. I too hope that Ford and our representative(?) MPP Clark are listening. C’mon boys and girls, stand up for the people you claim to be standing up for.

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