| Aug 04, 2005

Feature article, August 4, 2005

Feature article August 4, 2005

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Waterfront property taxes

Commentary by Mike Wise

I have considerable difficulty with WRAFT's (Waterfront Ratepayers Association for Fair Taxation) approach to the problem of escalating waterfront property values, as recently reported in the Frontenac News. My concerns are, firstly, their failure to relate to the many urban residents also experiencing this problem and, secondly, their proposed solutions.


Property values in some city neighbourhoods are increasing at a very much faster rate than the average for their city as a whole. Look at Ottawa or Toronto where neighbourhoods that were out of favour a few years ago are now very desirable. I have no problem with WRAFT, as the child of concerned cottage owners, being primarily concerned with waterfront property but why do they choose to ignore the urban dweller facing similar problems? Surely WRAFT must realize by now that they are barely on the political radar and that, when they are seen, it is often as the representative of those rich cottage owners who can afford to pay. Would it not be both fairer and more politically astute to bring the urban dweller living on a low or fixed income into the picture? The government has to be more considerate of those struggling to keep their homes than those struggling to keep their vacation properties.

As for WRAFT's proposal that a separate class be created for waterfront properties - do they seriously expect this to be seen as anything but the privileged trying to reduce their taxes? Why are they presenting a proposal that deliberately excludes those experiencing similar problems in our cities and towns?

Capping annual assessment increases is a useful way of cushioning the effects of sudden large increases in market value, it was used when taxation based on current market value was introduced a few years ago, but it must be carefully managed. If increases are capped at too low a rate, it has the potential to maintain large differences in the taxes paid on properties of comparable value for a very long time. An annual cap of 10% over and above the average increase in property values would be more appropriate than the 3% proposed by WRAFT. Also any cap should be lifted when a property is sold or transferred to a new owner. These measures would be required so that others in the taxation area were not subsidizing the owners of capped properties for an extended period.

The problems associated with our property taxation system will not be solved by applying such bandaid solutions. More often than not these solve one person's problem at the expense of someone else and they usually create more problems than they solve. We need to look at the real causes. Most of our property tax is used to fund social (e.g. education, policing, welfare, recreation) rather than property related services. The value of a property is not only unrelated to the value of these services, it is, all too often, also unrelated to the owner's ability to pay. We must press our provincial representatives to seek a more appropriate means of funding such services. We must press them to take another look at the consequences of downloading, particularly with regard to roads - a major expense for a rural community. We must also seek a more equitable sharing of industrial and commercial taxes between the urban and rural communities.

Turning now to the property value reassessments we expect to receive from MPAC this fall. Waterfront property values have risen sharply in the last couple of years. No doubt the temperatures of the owners of these properties, myself included, will similarly increase as we contemplate next year's tax bill. What can we do?

We can, and should, be vigilant in monitoring and lobbying our Mayor and Councillors to ensure that the Township delivers the services we require in the most cost effective manner - taxpayers are free to attend council meetings, including budget deliberations. But, as we do so, our actions and expectations must be tempered by the fact that the Province imposes strict requirements relating to the services to be provided and the manner in which they are to be funded; it has not given Council the authority to make the fundamental changes needed to bring equity and affordability to property taxation.

In the longer term, we can best help ourselves, and help our Council help us, by more vigorously lobbying our provincial representatives to make the changes required for an equitable funding of local services - provincial acceptance of a greater responsibility for the funding of social services, the downloading of only those services which are truly local responsibilities, the imposition of reasonable conditions on the provision of those services, funding based on a consideration of both the services received and the property owner's ability to pay, and an equitable sharing of industrial and commercial revenues. By addressing these issues we will be attacking the fundamentals of the problem, rather than the symptoms. And we will be embracing the problems and concerns of many more taxpayers than just those rich waterfront property owners.

How do you think we can get the Province to listen to, and act on, our concerns?

Mike Wise

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