Duane Hicks
The Ontario budget tabled last week is taking a step forward to address railway taxation issues, but a local councillor feels more work needs to be done.
The province has set a minimum of $80 an acre for property tax rates in municipalities if a rail line goes through it.
That means Fort Frances will receive an additional $8,000 in tax dollars annually–although Coun. Ken Perry still would like to see a more favourable freight rate based on tonnage.
“At least we’ve started the conversation,” reasoned Coun. Perry, who is vice-president to the Northwestern Ontario Municipal Association for the Rainy River District Municipal Association.
Last year, Coun. Perry brought the issue of railway taxation to NOMA, which, in turn, got the Association of Municipalities Ontario to lobby for it–after all, it is a province-wide issue.
“They’ve increased the minimum for the three northern areas of the province from $35 an acre to $80–which is a step in the right direction,” he remarked.
“It looks like a huge step in the right direction but it still doesn’t amount to a lot of money.
“[But] they also indicated they want to continue to increase it year over year, which is a good thing,” Coun. Perry added.
The province also has said it was willing to discuss railway taxation reform further.
“That’s the part that intrigues me because if they’re willing to discuss it further, we’re going forward to discuss it with them,” said Coun. Perry, adding he’s trying to “stay positive.”
“When someone offers you more than double what you were getting before, somebody woke up somewhere, right?” he mused.
Up until now, Fort Frances had been getting about $3,500 annually in railway taxes. With the latest announcement, the town will get more than $11,000.
However, if a railway taxation system based on tonnage were in place, like it is some other provinces, Ontario municipalities could be reaping hundreds of thousands–or even millions–of dollars.
“I don’t expect millions but if we went exactly like Alberta or exactly like Saskatchewan, we would get millions,” Coun. Perry stressed.
For example, Swift Current, Sask. is supposed to get around $581,000 this year.
“And the freight through Ontario, particularly Northwestern Ontario, is much more voluminous than it is coming through Saskatchewan because we pick up what’s in Saskatchewan, we pick up what’s in Manitoba coming through,” Coun. Perry noted.
“It has to be more this way.
“It also comes from the East Coast–from Boston and New York, and gets loaded onto trains in Halifax and Montreal–and comes through Ontario that way into the [U.S.] mid-west,” he added.
“All of Ontario should be benefiting from a more favourable freight rate.”
The boon the increased tax revenue would give to Ontario municipalities would be tremendous.
During budget time, for example, $500,000 in railway taxes would mean $500,000 the town wouldn’t have to get from some other source, Coun. Perry explained.
And this cushion could become more crucial down the road if the town’s loses more assessment–either due to commercial assessment appeals or if the mill is demolished.
Coun. Perry said he brought up the point to Municipal Affairs minister Bill Mauro the other day that when companies appeal their assessment, municipalities seem to lose hundreds of thousands of dollars at a time.
And in return, the government gives the municipalities back $40 at a time.
“It doesn’t weigh out properly,” he stressed. “If you’re going to take it from one hand and expect us to be able to do the same type of business as we did last year, you better give it back to us in another hand.”
Coun. Perry stressed the “good part” about railway tax reform is that the money isn’t coming from the province.
“The end user, which is the United States basically, would be paying the taxes,” he noted.
