by Councillor Jim Bertram
In a recent article, I mentioned the impact of provincial government regulatory change and provincial downloads as an accelerator in the rise of municipal expenditures. This is a matter of concern for local business and property owners who will feel the shock of these increases, as they will be borne on the local tax base.
Another factor in potentially driving us towards tax raises is a trend towards disappearing provincial funding. Years of over-spending in a priority-free green energy spending environment have resulted in a provincial fiscal cupboard which is far from overflowing with riches.
What to do? Among other things, the provincial government has, as indicated, decided to cut funding to municipalities, funding which would help cope with the download burden and the swell of costly new regulations. That is occurring as I write.
Another factor which will help drive taxes upward is the impact of rising home prices on the assessment of homes. As you are aware, your assessment is dependent on the value of your home, which is decided by MPAC. MPAC uses a set of procedures akin to that used in general property appraisal to establish your home’s value in a given geographical area or sub-market. That value can change as economic or policy changes develop.
As you may know, there are factors operating in the economy right now which are driving home prices much higher. In some markets, like Toronto and Ottawa, the rate of increase is considerable. Being in proximity to a large market (Ottawa) as we are, there is pressure on housing prices to move upward. Higher housing values will have an inevitable impact on taxes once MPAC adjusts the value of your home in an upward direction. As well, experienced observers of the housing sector as an economic factor indicate that aspects of provincial municipal planning policy, including the general approach to “intensification”, are contributing to the rise in prices in housing in many municipalities.
The entire range of factors contributing to severe upward pressure on municipal budget requirements merits attention for a host of reasons. Let’s summarise it this way: an upward spiral in taxes will have serious economic results for homeowners, business owners, and the larger economy. The municipal tax system includes property owners of all economic levels: the well-off, the middle class, and the less well-off. Spiralling taxes would literally drive poorer people from their homes. Those tax increases would impose greater hardship on the middle class group, leading them to divert income from important family responsibilities which require significant expenditure of funds. The only people who would be relatively free to continue their lives relatively unaffected are those few who have much higher levels of income.
Solutions? The province should not only cease the funding of provincial policies from the municipal tax base. It should upload provincially initiated policy responsibility to the provincial level, and pay for such initiatives from the provincial treasury. It should fund regulatory changes which have municipal impact, and do so permanently. It should stop loading more and more tax burden onto the tax bills of municipal business and property owners. The municipal tax structure was never designed to be used this way.
As well, citizens must let the provincial political parties know in no uncertain terms that this issue will be a deciding factor in the 2018 election. Contact the parties, including our MPP, and let them know you are no longer going to accept such callous treatment from the provincial government. Require that the provincial authorities take another look at the MPAC system, which raises your taxes when market conditions change even though no improvements have been made to your home. In short, let the province know that the game is over. I’ll continue to beat the drum on this issue, but an army of two or three won’t do the trick.
In the final analysis, it’s time to help yourselves. Get organised! Get active! It is not too early to do so in the context of next year’s provincial election.
