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Councillors confronted by great tax divide

No middle ground on new assessment plans

Toronto Star - July 7, 1998
By John Spears — Toronto Star GTA Bureau Chief

Dale Ritch wants Toronto councillors to ignore the province's new property tax system.

Paul Siemens wants council to implement the new system as quickly as possible.

And there's not much middle ground in the debate, a council task force on tax and assessment policy discovered as it heard public deputations yesterday.

A strong majority of speakers urged council to fight the new system or, if forced, to phase in the changes as slowly as possible.

But an equally adamant minority said they're paying too much now - and they want a break right away.

About the only surprise in the day came from Howard Tessler of the Federation of Metro Tenants' Associations, who told councillors not to cut taxes on apartment buildings.


Apartment buildings are heavily taxed, and could get big reductions under the new system and, in theory, that ought to benefit tenants.

Apartment buildings with seven units or more pay on average 4.6 per cent of market value each year in property taxes, while single family homes pay just 1.25 per cent.

But Tessler told the task force that the way provincial law works now, landlords are likely to grab any tax cuts before they ever work their way into the hands of tenants.

Therefore, he argued, there's not much use in cutting apartment taxes.

"It will be windfall profits for landlords," he said.

The task force is holding two days of public hearings, leading up to a special council meeting July 21 when council will set its 1998 property tax rates.

The province has introduced a new system, called current value assessment, which taxes properties at their 1996 values. Previously, Toronto's assessment system had been based on 1940s property values.

The new system tends to push up taxes for most homes in areas of the city built before 1950.

Dale Ritch, who has formed a group called Toronto Tax Freeze 98 to fight the new system, told councillors they're fooling themselves if they think the new assessments will stand up.

He said thousands of property owners will appeal their assessments, and will get them lowered. That will erode the tax base and force tax rates ever higher, he predicted.

Because the new tax base is so unstable, council should ignore it this year, he said.

"Simply send out the tax bills based on the 1997 assessment roll, using 1997 mill rates," he told the task force.

Councillor Ila Bossons (Midtown) noted that the new system is the law of the province.

But Ritch said in an interview a council committee only last month flouted provincial law by voting to ban liquor bottles from the city's blue boxes.

"Don't tell me they can't break the law if they want to."

Not everyone agreed with keeping the old system.

Paul Siemens told councillors he represents residents of a high-rise condominium on Marlee Ave. and complained he has been over-taxed for years.

Siemens figures a three-bedroom unit would enjoy a $738 tax decrease once the new system is in place.


Reading from a petition signed by 80 per cent of the building's owners, he said: "In the name of justice and fairness, we do not want to continue to subsidize the property taxes of others who have got an unfair tax break under the old system."

Many senior citizens have argued that tax increases under the new system will drive them out of their homes.

But Siemens said many of the residents in his building are seniors, and need the tax decreases so they can afford to stay in their units.

Others complained of anomalies in the current tax system. For example, an apartment worth $70,000 in a six-plex pays $868 a year in property tax; the same size apartment in a seven-unit building pays $3,108 a year.

Heather and Mary MacDonald, two sisters who own an eight-unit apartment building in York, said that's absurd.

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