Tax Report

TABIA AGM 2016 – Lionel Miskin

 

Vice-President Lionel Miskin, Chair of the Tax Committee, reported. If you tax too high, business leaves. If tax rates were lower would we still have flights to tax havens? If tax levels deter new business or expansion of existing businesses, how much tax do you collect? Mayor Tory has acknowledged that it is difficult to entice new business to Ontario and more difficult to entice it to Toronto. Without a struggle there can be no progress. We struggle. There is progress.

In October 2015 Lionel Miskin and John Kiru made a presentation to the City of Toronto’s Economic Development Committee, a committee of Councillors responsible for overseeing issues relating to economic development in the city. They told the committee that the best way to attract new business, to say nothing of keeping existing business, is to minimize regulation and taxation. They raised three issues:

1. The tax rate ratio is the ratio between the rate imposed on commercial property and on residential property. When TABIA first became involved, the ratio was 5:1. Thanks to TABIA’s advocacy, gradually over years the ratio reduced to 2.5:1. By reducing commercial rates this program has saved commercial property owners a significant sum of money. But it requires constant attention by TABIA as City Council can alter the ratio at any time. It is important to continue the current program and extend it to 2025 to reduce the ratio further, to 2:1. 

2. Toronto imposes discriminatory rates on Toronto’s commercial properties compared to certain other municipalities. Under provincial property tax, which the Province of Ontario calls Business Education Tax, Toronto property is taxed at a much higher rate than surrounding municipalities. The discriminatory rate makes it more difficult for Toronto businesses to compete with neighbouring businesses, especially when combined with higher assessments.

3. Tax relief should be given to businesses located in long-term construction zones. Eglinton Avenue is St. Clair Avenue all over again.

Following TABIA’s presentation, the Economic Development Committee passed two resolutions:

- for staff to investigate further the application of the provincial property tax, and

- for staff to explore how other municipalities have dealt with the effect of long-term construction on businesses.

We now have our foot in the door, although with no immediate relief.

The tax assessment methodology used in Ontario assesses properties at their highest and best use rather than their current use. This is devastating for small businesses. Now the Province seems to be giving an unusual privilege to “special business properties.”

Some owners have the opportunity to negotiate their assessment with MPAC behind closed doors before the new assessments are issued. The result will show up in the public assessment rolls but the public will never know how the assessment was arrived at. It seems confirmation that the assessment process does not work for some properties. Ironically, the provincial budget repeatedly uses the word “fair” and the Liberal party loves transparency.

Notwithstanding the lack of transparency, we hope this is the thin end of the wedge for assessment. Governments do the right thing after exhausting all other measures. Let’s hope that happens here.

 

Lionel Miskin

Vice President, TABIA

Chair, TABIA Tax Committee

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