John Barber's column today is the latest to discuss the property tax adjustment happening at Toronto City Hall. To address complaints about a so-called imbalance between residential and commercial/industrial property taxes in the City, Council has passed a plan that will gradually shift more of the burden from businesses to home-owners.
The revenue-neutral plan is said to increase the average home-owner's taxes by $10 per year for 15 years, with consequent decreases in commercial rates. In 2005, the average home was assessed at $330,700 and charged $2,019 in city property tax. So, this $10 increase is just under 0.5%. To me this seems to be too puny to solve anything, but apparently it will be enough to make a marked difference in the ratio of residential tax rates to commercial/industrial tax rates.
Toronto business associations have been going on about this tax ratio for some time. I always found it hard to know whether they should be taken seriously. On one hand, there is something to be said for being competitive with the bordering areas. On the other hand, business associations seem to exist merely for the purpose of agitating for lower taxes, whether or not such demands are reasonable. This makes them hard to trust.
An interesting point to make is that many -- including John Barber in the column mentioned above -- are linking this reform to the issue of provincial overtaxation of Toronto businesses. As I wrote in 2004:
For some reason the change that City Council has made counts as "getting your own fiscal house in order", which was apparently a prerequisite for complaining about this provincial inequality.
Okay, whatever. I actually thought that the Province's special loving treatment of Toronto business property owners was worthy of complaint even before this reform. But, as this change seems to have been rather painless, I'm hoping we will finally see some action at Queen's Park. (Dalton McGuinty never had a valid excuse for continuing this practice, but I guess an invalid one has just been removed.)
I also hope that organizations like the Toronto Board of Trade will finally focus on the provincial government. Bizarrely, they have tried to blame the provincial inequality on City Hall (link PDF, see page 10 / recommendation 2). As silly as that was, it is time for them to move on to the next battle.