Tax reforms could upset town’s budget

The town’s 2001 budget may face a severe burden if suggested provincial tax reforms go ahead.
If the province implements Bill 140, a bill which will cap industrial, commercial, and multi-residential tax levels, and the reforms are retro-active to Jan. 1, 2001, town council will be forced to make severe budget cuts or throw the entire 2001 tax increase on the backs of residents.
“You’re making two kinds of taxpayers in Ontario and that’s not fair,” Coun. Sharon Tibbs argued during Monday night’s meeting.
Under the upcoming reforms, the tax cap–which will be put onto all industrial, commercial, and multi-residential tax levies in order to ease tax burdens on development–may already be above Fort Frances’ tax ratios.
For all communities in that situation where tax ratios already are above the provincial average, all future tax increases will be forced onto residential properties only.
Council already has approved a two percent tax levy increase for 2001 which, under the impending legislation, council would have to go back and re-assign the entire increase onto residential taxpayers–or find a way to function without the increase.
“That’s only going to come from two places, our capital funds or it’s going to have to go on residents and I can’t see us doing that,” said Coun. Deane Cunningham.
“If you’ve got to go back and revisit the budget and if you have to lower your commercial [tax] two percent, what do you do?”
“It’s legislation that was needed but the timing and dumping upon was unfair,” agreed Mayor Glenn Witherspoon. “It has to have the proper timing and you have to give us the tools for it. It will work if you help us.”
NDP leader and local MPP Howard Hampton first introduced the draft legislation at the Rainy River District Municipal Association’s annual meeting in Atikokan on Jan. 20.
Fort Frances, like most Northwestern Ontario municipalities, already is well above the province’s average tax ratios of 2.4 percent in the industrial sector (sitting at 4.9 percent) and the commercial tax ratio of 1.4 percent (3.3 percent).
“I was embarrassed. We charge astronomical prices to the people that generate 60 percent of our tax base,” Mayor Witherspoon said during Monday’s council meeting.
At the RRDMA meeting last month, Hampton stressed for municipal leaders the direction all tax increases will have to take under Bill 140.
“Bill 140 will essentially put those municipalities in a position where, if they have to raise the taxes, they won’t be able to increase the industrial, commercial, or multi-residentials.
“They’re basically putting a strait-jacket on those taxes,” he argued.
“The effect of the ratios is communities like Fort Frances are all put in this box. If they have to raise property taxes, it’s going to be on residences,” Hampton warned.
For now, municipalities are left in limbo as the province crunches numbers for Bill 140, with all the details expected to be officially released in March.