Property Assessment and Classification Review - Issues for Future Consideration

ISSUES FOR FUTURE CONSIDERATION

The following segment of the report presents issues that were raised during the consultations which fell outside the parameters of the mandate for this review. These issues are being included in this report because the author believes they are sufficiently important to merit future consideration by the government.

CAP ON TAX INCREASES

In 1998, the Province imposed mandatory limits on property tax increases for commercial, industrial and multi-residential properties to mitigate the impacts of property tax reform.

The mandate for this consultation project did not include a direction to review the merits of the cap on tax increases. However, numerous stakeholders expressed views on the capping mechanism during the consultations. In particular, municipalities voiced concerns about the administrative complexity of the cap, and taxpayers noted their concerns about the limitation of tax decreases through the clawback mechanism.

There is a general recognition that the mandatory 5% cap on tax increases was, and continues to be, an important tool to ensure that the transition to CVA is manageable. However, it is evident from the submissions received during this review that taxpayers and municipalities strongly support the implementation of CVA, and there is a general desire to see mandatory caps terminate by a fixed date in the future so that CVA can be fully implemented.


Recommendation:

  • It is recommended that the Province conduct focused consultations with stakeholders on the question of the continuation of the mandatory cap on reassessment-related tax increases.

    During these consultations, it is recommended that the Province review the progress that has made in each municipality towards achieving full CVA since 1998, and that quantitative analysis be conducted to study the impact that taxpayers would experience if there were no mandatory caps in place.

CROWN LAND

Most communities in Ontario are able to access their land base as a source of property tax revenue. However, some municipalities, particularly those in northern and remote parts of Ontario, have large tracts of unpatented Crown lands within their borders. (Unpatented Crown land is land that has never been conveyed or deeded to anyone.)

While the provincial and federal governments generally make payments in lieu of taxes to municipalities in respect of their properties, payments in lieu of taxes are not paid in respect of unpatented Crown land.

Some municipalities have expressed frustration that they are required to provide services in and around these lands (e.g. road maintenance and fire protection) but they receive no revenues from them. Even where the lands are used for certain purposes, such as the placement of hydro transmission lines, no property taxes or payments in lieu of taxes are paid to the municipality.


Recommendation:

  • It is recommended that the Province conduct further consultations with municipalities to address their concerns about Crown land.



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