A Progressive Conservative MPP at Queen’s Park has introduced a bill that, if enacted, could spell relief for some of the city’s businesses struggling with massive property-tax increases. Robin Martin, MPP for Eglinton–Lawrence, has proposed Bill 179, the Assessment Amendment Act (Areas in Transition), which would allow municipal councils to designate parts of their city as “areas in transition” and prohibit the provincial property-tax assessor from using speculative land values in its calculation of property value.
Some businesses are seeing rapid increases in property taxes, not because their own properties are being redeveloped but because they’re near properties whose values are ballooning — Martin hopes that her bill would slow or help stop the trend.
“I’m sure you’ve noticed there are a lot of properties are vacant, and I’ve spoken with a number of commercial establishments along Yonge Street … what I’m being told from owners and renters is that property taxes have just gone crazy,” Martin says. “It’s an awful lot of money — in some cases, as much as they’re paying in rent.”
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The direct effects of Toronto’s red-hot housing market are obvious enough: costs are going up everywhere, for renters and owners alike. The consequences for people on lower incomes are devastating, and middle-class families are only a little better off. The Toronto Region Board of Trade now has a campaign to preserve and expand housing options even for families who would normally be considered fortunate enough not to need help.
But the housing market creates indirect effects, too. Properties in the parts of Toronto that have seen the greatest redevelopment pressure from the city’s condo boom have, predictably enough, seen property-tax assessments skyrocket. This has been a complaint of numerous city councillors, both in the provincial capital and elsewhere in Ontario, as businesses run out of modest two- and three-storey buildings have suddenly started to face tax bills based on an imagined 20-storey condo tower above them.
Martin sees the effects of such assessments all over her riding, which happens to be one of the city’s growth centres.
“I’ve spoken to numerous businesses who say they’ve had to shut down or they’re considering it because of property taxes,” Martin says. “It’s really about keeping the community a vibrant place for people to be. As a resident, it’s a bit depressing to see empty storefronts, and it doesn’t help other businesses, either.”
However, tinkering with the market-value-assessment process in Ontario carries risks. Enid Slack, director of the IMFG, says these kinds of changes amount to “phantom tax relief” that governments find less costly than simply lowering tax bills.
“If you have other objectives, like keeping that restaurant in business, then isn’t there another way to do it?” Slack told TVO.org last year.
Martin acknowledges that there may be other ways of attacking the problem in Toronto but sees her bill as a way of helping municipalities handle the pressure they’re under.
“This is putting a tool in the hands of municipalities so they can address these issues,” Martin says. “It really is up to the city; they can designate an area ‘in transition’ and then undesignate it at another time.”
Private member’s bills like Martin’s are debated according to a calendar set by randomly drawn ballots; the earliest she’ll be able to bring anything to the floor of the legislature is in October. She has other private member’s bills on the legislative agenda and may not choose to use her one and only opportunity to debate Bill 179.
There is, however, a long tradition of governments adopting measures that were first born as private member’s business. Both the 2019 budget and the fall economic statement included commitments to reform Ontario’s property-tax-assessment system and to ensure a “competitive property-tax system.”
If there are any major changes on the way for Ontario’s property-tax system, we’ll likely hear about them sooner rather than later: Minister of Finance Rod Phillips will be announcing the budget on March 25.