It Is Not What We Pay But How It Is Spent

For Miller,(and the taxpayer) now comes hard part

One crisis is over for Mayor David Miller, with the end of a 39-day strike by Toronto's municipal workers, but another looms in the form of a massive budget deficit – potentially requiring desperate measures next ...
One crisis is over for Mayor David Miller, with the end of a 39-day strike by Toronto's municipal workers, but another looms in the form of a massive budget deficit – potentially requiring desperate measures next year. This city's administration would be wise to begin confronting that crisis now in hope of blunting its impact.

Toronto's hidden tax grabs

Lowest property taxes in the GTA more than offset by growing user fees, critics say

By JENNY YUEN, SUN MEDIA

Toronto residents may pay the lowest property taxes in the GTA, but the city's true property tax rates are being masked by growing user fees, resident groups and council critics told the Sunday Sun.

At 0.85%, Toronto's combined rate for city and education taxes is the lowest in the GTA. But when you combine other fees, such as garbage, a personal vehicle tax and the land transfer tax, homeowners are also feeling the pressure of being "taxed to death."

At the same time, city council has made property tax hikes an annual habit.

"Have we had it easy? No way," said Eglinton Park Residents' Association chairman Jordan Applebaum. "We've seen multiple spikes and it's become cost-prohibitive to move because of the land-transfer tax and other costs that people in Oshawa and Oakville don't experience. It's very onerous."

City budget chief Shelley Carroll told the Sunday Sun that it's not council's intention to implement the added user fees to mask a higher taxes.

"That's not the reason for doing those things," she said. "That is more a part of our environmental goal, to take those things that really are consumption-based. We all want equal access, but there are some services that are really consumption based, like garbage. Switching them to a utility fee makes sense."

Last fall, the city implemented a new vehicle registration tax, which costs drivers an extra $60 annually and hiked user fees for things such as ice-rink rentals and swimming lessons by 3%. The city also implemented a new garbage fee, which charges $133 for a medium-sized garbage bin.

For residents who bought a house last year, they were also hit with the new land-transfer tax, which adds more than $4,000 to the sale of an average home.

Councillor Doug Holyday said Mayor David Miller and the rest of council need to get their spending priorities straight.

'CAN'T AFFORD INITIATIVES'

"I think it's time for the city to start living within its means and that it can't afford a lot of the initiatives that we're getting into, even increasing public transit is great, but only if you can afford it," he said.

"The land-transfer tax is not an apparent tax and we don't provide any service for it, it's just the province gave us a way of collecting money. It's a pretty slick way of increasing taxes and trying to keep it under the radar, but totally unfair."

Meanwhile, Applebaum said many homeowners he's spoken to have been moving north of the city to avoid paying the land-transfer tax.

"I've heard that after we pay our taxes, 20% to 25% is all we have left," he said. "I'm a wealth investor and a lot of clients are looking north of Steeles Ave., largely driven by a desire to avoid the land-transfer tax."

The budget chief blames previous years of a lack of political will as the reason why today's council is left with the tax rate cleanup.

"If you look at the tax increases under Mayor (Mel) Lastman after second term, after amalgamation, he was well and able to guarantee 0% in his first term, because he didn't really know what the real outcome of the download of social services was going to be," Carroll said. "He was assured by the province that it would be cost neutral and it wasn't. So in his second term, you'll see property tax increases of 5% and one year was 6%."

Carroll added that homeowners understand that annual tax hikes are necessary to build vibrant communities.

"My residents said, 'Ultimately, if we don't let you do this, God knows what my property tax increase will be like down the road' or 'What good is this if businesses move out of the city?'" Carroll said.

"We do everything we can to build the city that they're looking for, that they deserve and we control the cost to do that. That's our role on the budget committee."

Councillor Case Ootes said he's monitoring how these hot tax issues will impact the next election.

"It's a tax and spend regime, there really isn't any expenditures at city hall, so the question of raising taxes over the next few years is going to be an issue in the next election," he said. "The question of different taxes like the land-transfer tax and vehicle tax will also be election issues in 2010."

JENNY.YUEN@SUNMEDIA.CA

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BECOMING A HABIT

PROPERTY TAX INCREASE EVERY YEAR SINCE 2003

Residential property taxes have grown by at least 3% every year since Toronto Mayor David Miller was first elected in 2003, despite an election promise then to keep tax hikes -- "when necessary" -- "at or below" the rate of inflation.

Tax hike inflation rate

2004: 3% +1.7%

2005: 3% +1.9%

2006: 3% +1.6%

2007: 3.8% - 1.9%

2008: 3.75% - 2.4%

2009: 4% NA

Novae Res Urbis

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HOME OWNERS

RESIDENTIAL PROPERTY TAX RATES

Toronto residents pay the lowest property taxes in the GTA, but some critics say that higher taxes are being masked by some of the most user fees in the area. Residential

Oshawa 1.76%

Brock 1.58%

Clarington 1.44%

Whitby 1.42%

Ajax 1.41%

Pickering 1.39%

Barrie 1.38%

Georgina 1.36%

Scugog 1.36%

Uxbridge 1.28%

Brampton 1.23%

Newmarket 1.15%

Aurora 1.12%

East Gwillimbury 1.10%

Burlington 1.08%

King 1.07%

Vaughan 1.04%

Whitchurch-

Stouffville 1.04%

Halton Hills 1.03%

Oakville 1.02%

Richmond Hill 1.02%

Mississauga 1.02%

Markham 1.01%

Caledon 0.98%

Milton 0.92%

TORONTO 0.85%