Ontario Libs Have Tax Policy All Wrong

This story about how the Ontario Liberals will raise taxes in smaller municipalities has me on the defensive, especially given that I live in one of these ‘smaller’ communities.

The suggestion is that smaller municipalities need to find ways to support various expansion and infrastructure programs.  On the surface, this is a laudable objective, but it represents a very ‘Torontonian’ view of the rest of the province.

It suggests that everyone needs to find ways to generate more revenue when there’s no revenue to be had, while Toronto goes unscathed.

(Granted, I’m fully aware of the ‘unique’ taxing authority of the City of Toronto, which it does use from time to time).

The real answer to the problem is quite obvious:  tax Toronto.

Don’t be fooled by those that can’t count or who are blind to the real economic situation when comparing actual property taxes.  This does not matter, given the disproportionate differences in actual house prices.

On a ‘mille rate’ basis, Torontonians pay one of the lowest municipal tax rates – in the country!  Vancouver leads the way, which is why their market is hyper-inflated and the province has had to introduce a special real estate transaction tax on foreigners.

Toronto’s mille rate is a meager 0.85 per $1,000 in assessed value.  Timmins is nearly 2.2.  Ottawa looks to be the lowest at just 0.79 (but they’ve got the Capital Commission paying for a lot of activities, so this makes sense).  The average is just a little over 1.00.

Raising Toronto’s mille rate to the average would net hundreds of millions in revenue for the City of Toronto per year.  Instead, Toronto has actually been reducing it’s mille rate.  This is partly because of the provincial leadership’s view of Ontario as Toronto first and the rest, well, myeh.

Be it a higher property tax (what I would prefer), better current assessments of Toronto properties or real estate transaction tax (more politically expedient), the answer should be obvious to everyone, including those in Toronto.

Forcing the City of Toronto to raise their property tax rates would have many positive effects for the province on a whole:

1. It would end the real estate madness that’s taking place there now
2. It would transfer economic and growth benefits to the rest of the province, by virtue of the fact that people will leave and set up shop elsewhere
3. It would ensure that the books are balanced in Toronto, ending the annual ‘palms out’ process that takes place every budget season.
4. The City of Toronto would finally be able to afford the serious infrastructure that it needs to support the volume of people that have moved into town in recent years – mainly to benefit from absurdly low property tax rates.

Higher regional / rural property taxes are not the answer to Ontario’s tax issues.  Cutting spending is the answer, followed by more realistic taxes on Toronto.