A discussion on provincial tax reform last Wednesday at La Place Rendez-Vous here, including representatives from municipalities and unorganized areas in the district as well as the Ministry of Finance, may have been the start of a long-overdue process.
The consultation was one of 11 being facilitated by the Ministry of Finance at different sites across Northern Ontario as part of a commitment by the Liberal government to get input on a taxation system that hasn’t changed in decades.
“The consultation was a discussion of how the land tax reform could roll out. If there was a message, it was a message of equity,” Fort Frances Coun. Tannis Drysdale said Friday.
“I believe the provincial land tax reform that was proposed in 1998 has to take place,” she added. “Everyone owning property in unorganized areas should be taxed according to services they have access to.
“They shouldn’t be forced to pay for what are traditional municipal services, but those which previously were covered by the provincial government,” Coun. Drysdale argued.
She noted the provincial downloading of services like public health and social services onto municipalities has resulted in situations which are unfair.
For instance, since property tax is the main means by which municipalities can collect money to pay for essential services, the amount of assessed property determines the limit of tax dollars available to pay for those services.
If properties in unorganized areas were assessed with a revised formula, they could be taxed for a greater share—and thus organized areas that currently carry much of the burden when paying for essential services wouldn’t have to shoulder quite as much.
Currently, property owners in unorganized areas pay between $40-$60 in property taxes a year regardless of the actual value of their property. Coun. Drysdale noted a $300,000 home at Bear’s Pass, for instance, likely would have a tax bill of $60 a year.
On the other hand, she conceded unorganized areas actually pay higher education taxes than they should—and this should be adjusted downward.
Coun. Drysdale said there’s an estimated $2.6 billion worth of property that isn’t being properly assessed across the province, including more than $24 million right here in Rainy River District.
She noted land tax reform originally was proposed back in 1998, but nothing ever happened under the former Conservative provincial government.
While acknowledging that dealing with unorganized areas was not a concern in the south because of the county system in use there, in her opinion that hasn’t been the real reason for the delay.
“It [provincial land tax reform] is administratively difficult, but moreso, politically troubling,” Coun. Drysdale said.
“In some areas of the north, there are some very wealthy people from the south that have millions of dollars worth of property. And they don’t want to pay the taxes,” she charged.
According to the ministry at last week’s meeting here, the Provincial Land Tax Act was introduced in 1924 but hasn’t seen many changes over the years.
There has been no reassessment of the roughly 60,000 provincial land tax accounts since 1940 and the tax rate has not changed since 1954. A uniform tax rate of 1.5 percent applies to the assessed value of all property and there is no classification of different types of property.
Coun. Drysdale is hopeful a report regarding provincial land tax reform would go back to the Cabinet this winter, and actual reform come about in the next couple of years.
But she admitted at this point, the province only has made a commitment to review the land tax formula—and not promised to change it.
Fort Frances Times
Local News from Across the Rainy River District
