LandLandTheThe EconomistEconomist Win t e r 2002-03, Vol. 33, No.1

A tale of three markets ...... 2 In the last few years, the correl a t i o n between housing and stock markets has broken down. Employment seems to be a key factor. 40th Anniversary ...... 3 New members ...... 3 In d u s t r i a l rep o r t ...... 4 When the economics of leasing, pu r chasing or building a new indus- trial building in the GTA are com- pa r ed, totals are surprisingly close. Into depression & beyond ...... 6 Omens of global depression are gathering, but there is promise of a bright future beyond – and Land Economists have a role to play. Use the aole.org website! ...... 7 Keep your information curren t !

Legislative Beat ...... 8 House in Recess • New Minister of Municipal Affairs and Housing • Pr ovincial Election Readiness • Pro p e r ty Assessment and Classifi- cation Review • Statute of Limitations • Alternative Energy and Fuels • Sustainable Water and Sewage System Act • Municipal Act/Elections

Pr ofessional Journal of the

ASSOCIATION of LAND ECONOMISTS 1235 Bay Street, Suite 400 , Ontario M5R 3K4 Tel: (416) 934-5166 Fax: (416) 969-8916 Website: www.aole.org E-mail: [email protected] A tale of three markets by Will Dunning PLE Chart 1 During the 1990s, the Toronto housing market was loosely correlated with the stock market. During 2000 to TSE index vs Toronto CMA employment 2002, however, there has been a disconnection between 12000 3000 these two major markets. While the stock market has TSX Index declined sharply, with the TSX down by about 40% from 10000 Employment 2800 its August 2000 peak, the GTA housing market has strengthened. Records for new home sales were set each 8000 2600 year from 2000 to 2002. 6000 2400 One interpretation might be “asset substitution” – the idea that as the stock market has weakened, investors have 4000 2200 shifted res o u r ces to a diffe r ent asset class – their homes. 2000 2000 On closer examination, it seems that another market – the job market – is intervening between the two. 0 1800 1990 1992 1994 1996 1998 2000 2002 The TSX started a strong upward movement in late 1995; employment began to increase strongly about a year later. Si m i l a r l y , about a year after the stock market peaked in August 2000, employment growth almost halved (Chart 1). C h a rt 2 - Two bubbles and two busts A number of mechanisms link a rising stock market with job Causes of employment growth in Toronto CMA creation: q Stock transactions and Im p a c t i n g Jun 84-Jun 89 Sep 89-Sep 94 Aug 94-Aug 01 Aug 01-Nov 02 profits influence employ- Var i a b l e 1, 0 0 0 s % of 1, 0 0 0 s % of 1, 0 0 0 s % of 1, 0 0 0 s % of ment in the financial of Jobs Tot a l of Jobs Tot a l of Jobs Tot a l of Jobs Tot a l services industry. TS X 87 25 % -3 6 25 % 30 0 52 % 12 22 % q With the substantial amount of invested wealth in the $ CDN 38 11 % -1 1 7% 21 2 37 % -1 0 -1 8 % Tor onto area, increased stock Raw Materials values lead people to spend Price Index -7 4 -2 1 % -2 1 15 % 17 3% 13 24 % more, which generates jobs. Mo r tgage Rate 90 26 % 41 -2 8 % 30 5% 1 2% Real House Prices 19 1 54 % -9 4 65 % -1 4 -2 % 28 50 % q Increased funds are available to start new businesses and Un e x p l a i n e d 20 6% -2 4 16 % 32 6% 12 21 % expand existing businesses. Total Change in The statistical analysis in Chart 2 Em p l o y m e n t 35 1 10 0 % -1 4 5 10 0 % 57 7 10 0 % 56 10 0 % decomposes the impact of a number of key variables on employment in the Toronto area: q During the late 1980s ‘Boom’, increased wealth Chart 3 caused by the growth in real house prices had the most significant impact on employment. Significant Impact of 1000 jobs on new home sales amounts of stimulus were provided by other variables. The only negative factor was the rising prices of raw materials (RMPI). Freehold q During the subsequent recession, the biggest negative factor was falling house prices. Condo q q During the late 1990s, the rapidly inflating TSX stock index generated more than one-half of job g rowth in the To ronto CMA. The steady depre c i a t i o n of the Canadian dollar provided additional stimulus. The only negative factor for employment was that house prices declined modestly in real term s . q Since August 2001, the greatest support for To ro n t o CMA employment has again been from rising house

2 prices. Falling prices for raw materials have also been positive. On the other hand, the Canadian dollar has been a negative factor. Changes in employment do not affect sales in the housing market instantly. As an output from my forecasting models, I have estimated the lag effect between employment growth and sales of new homes in the GTA (Chart3). In the first half year after 1000 new jobs are created, the result is only about nine new home sales. That rises until the fourth half year, when about 46 freehold sales and 13 condominium sales are generated – then the effect begins to decline. C o n c l u s i o n An excessive amount of employment was generated by the stock market bubble of the late 1990s. So far, the falling TSX has not had a very negative impact on employ-ment, as there is still a slightly positive equity wealth effect. H o w e v e r, in the near future, the TSX declines will likely begin to exert a significant negative influence on employment. It is possible that in the near future there will be outright reductions of employment in the Welcome New Members! To ronto CMA. That downturn should be gradual, as the recent increases in house Gregory Bell PLE William Nichols MSc, PQS, prices, the depreciation of the dollar, and Royal LePage Commercial Inc. MCIOB, PLE reduced interest rates will act to support Toronto Mutual Gain Inc., employment. 416-359-2638 Toronto [email protected] 416-491-1711 ext 23 Despite the economic slowdown, housing [email protected] market activity so far has been excep- Gus Dal Colle PLE tional. Previous employment growth has Altus Group, Toronto Sue Perella AIMA, PLE generated a very large pool of people 416-221-1200 ext 208 Derbyshire Viceroy Consultants who are getting into position to buy a [email protected] Limited, Toronto home. During 2003 and 2004, that pool 416-232-9999 ext 271 of buyers will be depleted gradually. In Winson Chan FRI, MCMI, [email protected] con-sequence, the outlook is for a MBA, PLE Del Realty Inc., Unionville gradual winding-down of housing J. Douglas Shenton PLE 416-230-1681 market activity. After setting a new Wendy's Restaurants of Inc. [email protected] re c o rd in 2002 (expected to be 55,500 Oakville sales), new home sales are forecast to be Thomas Davis P.Eng, PE, PLE 905-337-4645 in a range of 37,500 to 45,500 in 2003. Green-Tech Environmental [email protected] Engineering Ltd., Toronto Tony Volpentesta MCIP, Will Dunning, an economic consultant 416-364-1760 RPP, PLE who specializes in analysis of the [email protected] Bousfield, Dale-Harris, Culter & housing market of the Greater To ro n t o George Lysenko MA, MCIP, Smith Inc., A rea, spoke at the November dinner CMM, PLE Toronto meeting. Samples of his subscription Forhan Rogers, Newmarket 416-947-9744 “ F o recast Report” on the To ro n t o 905-895-0011 [email protected] economic and housing market outlook, [email protected] and other recent re p o rts are available at w w w. w d u n n i n g . c o m .

3 The following analysis compares the costs for a typical industrial building of 100,000 square feet on 5.1 acres of land in four municipalities: the City of Industrial report Toronto (represented by North York), Mississauga, Vaughan, and Pickering. Three options are considered: leasing an existing building, purchasing a building, and The Economic purchasing land and building a new facility. While the market decides how much it will cost to build a new factory or lease an existing factory, the Province and local Government determine the taxes and Industrial Bui development charges on new construction. The analysis considers those compara- tive factors due to market conditions (i.e. land costs, lease costs building pur- by Alastair H. Strachan chase costs) and those due to municipal conditions (i.e. annual taxes, develop- ment charges). the City of Tor onto is the only Municipality between Burlington and Pickering and north to Newmarket Chart 1 Taxes, Maintenance & Insurance that does not levy a Development Charge. (There is an Education Development Charge in all Toronto Mississauga Vaughan Pickering Mu n i c i p a l i t i e s ) . Tax rate 7.14% 4.06% 3.61% 3.58% Leasing an Existing Building (Chart 3) Assessed value $4,000,000 $4,000,000 $4,000,000 $4,000,000 When it comes to leasing on an equivalent net Total $285,600 $162,400 $144,400 $143,200 rent per square foot comparison, Toronto is, Tax($/sf) 2.86 1.62 1.44 1.43 surprisingly, the least expensive. The huge Maintenance/insce 1.50 1.50 1.50 1.50 demand for facilities in the booming 905-area TMI($sf) $4.36 $3.12 $2.94 $2.93 north and west of Toronto has pushed up the lease Total TMI $435,600 $312,400 $294,400 $293,200 costs outside the city substantially. Lease costs, however, account for only about half the occupancy costs; taxes, maintenance, and Chart 2 Development Charges insurance may add another 50% to the occupancy cost and this is where Toronto falls back to the Toronto Mississauga Vaughan Pickering rest of the pack. The combination of municipal City ($/sf) 0 1. 8 3 1. 2 5 1. 1 5 taxes, maintenance and insurance cost are almost Region ($/sf) 0 2. 6 0 2. 5 1. 3 9 30% higher in Toronto than in the other School Boards ($/sf) 0. 2 3 0. 4 8 0. 3 6 0. 1 8 Municipalities in our survey. Consequently, total Unit Total ($/sf) 0. 2 3 4. 9 1 4. 1 1 2. 7 2 occupancy costs for leasing are virtually the same Total for Building $2 3 , 0 0 0 $4 9 0 , 9 0 0 $4 1 1 , 0 0 0 $2 7 2 , 0 0 0 across the GTA. Other ($/acre) - $1 3 , 9 3 3 - - We have assumed that leasehold improvements are Total for Land - $7 1 , 0 5 8 - - not req u i r ed and that the leased space would be immediately available for occupancy. Total Dev’t Charge $2 3 , 0 0 0 $5 6 1 , 9 5 8 $4 1 1 , 0 0 0 $2 7 2 , 0 0 0 Purchasing an Existing Building (Chart 4) The cost to purchase an existing building is Assumptions Taxes, Maintenance & Insurance remarkably similar across the GTA. However, the q Building size 100,000 sf (Chart 1) owner of a building has to pay the taxes, mainte- - Offi c e s 10 % Whether you lease a building, buy an nance, insurance existing building or build a new facility; and utilities. Chart 6 — Annual Cost Com - Industrial space 90 % taxes, maintenance and insurance costs Once again, q La n d 5.1 acres have to be paid. Toronto’s taxes add significantly (45% coverage) Toro n t o ’ s reputation for having a high Leas municipal tax rate is justified, as to the annual 1000000 q Co n s t r uction costs $4 0 / s f industrial real estate taxes are more occupancy costs. q Annual financial carrying cost 6% than double those of the other Note that municipalities in our surve y . frequently the 800000 (applied to full capital cost) The tax rate is for prop e r ty used industrial stock q Assessed value for taxes $4 million specifically for manufacturing or in Toronto is 600000 q Owner maintenance pro c e s s i n g . older and hence and insurance $1 . 5 0 / s f Development Charges (Chart 2) additional 400000 maintenance q Maintenance refers to outside Regions and Municipalities assess all new construction a one time costs may be maintenance such as snow rem o v a l incurred. We 200000 and grass cutting and does not Development Charge. Our surve y indicates that what Tor onto receives on have assumed include building repairs and upkeep that any building 0 municipal taxes, it gives back (at least in Toronto Missi q Lease/sales data current as of 2002 pa r t) in Development Charges. In fact, purchased is

4 After using the result of a market q How will financing affect the analysis to determine where to locate, balance sheet? you still have to decide whether to q Do I have the flexibility if I want build, lease, purchase or build new. It to expand? of Selecting an is not an easy decision. q If I have to pay a premium to be In fact, companies concerned about in a particular Municipality, is the high cost of real estate (typically the premium worth paying? ing in the GTA the third largest business cost) often fail to ask the right question. The Alastair H. Strachan, Vice President Morrison, B.A. Hon, PLE question is not “How can I minimize & Sales Manager for Toronto my real estate costs?” The question Industrial & Land, at Royal LePage eady for occupancy and does not require should be “How can I use real estate Commercial Inc., manages the enovating or upgrading. Note also that carryi n g to enhance my business?” suburban industrial sales force in costs and variable costs do not include additional Toronto. John Morrison, the There are other important questions administrative and overhead costs associated with company's Associate Vice President, to be answered, such as: owning a building. Land Sales & Investments, New Construction (Chart 5) q Where is the best labour pool? specializes in commercial land sales Construction costs are essentially equivalent q How will transportation affect in the GTA and surrounding across the GTA (we have assumed $40 psf). Land logistics costs? municipalities. John is also Vice costs, on the other hand, vary considerably not just q Do I need to be near my President of this Association, and its between municipalities but also within the suppliers? Membership Chair. municipalities themselves. Tor onto, contrary to popular belief, is not the high Chart 3 — Leasing an Existing Building cost municipality when it comes to industrial land for continuing industrial use in the former suburban Toronto Mississauga Vaughan Pickering ar eas of the City. The price, however, for industrial Lease ($/sf)4.47 5.76 5.98 5.30 ands for redevelopment closer to downtown will be TMI 4.36 3.12 2.94 2.93 considerably higher. Pickering, where demand is Total ($/sf) 8.83 8.88 8.92 8.23 lo w e r , has the lowest land costs in our sample. Total Annual Cost $8 8 2 , 6 0 0 $8 8 8 , 4 0 0 $8 9 2 , 4 0 0 $8 2 3 , 2 0 0 When all the components are considered (building, land and Development Charges), the total costs are surprisingly close across the GTA. Chart 4 — Purchasing an Existing Building

Building a facility has an advantage over purchasing Toronto Mississauga Vaughan Pickering or leasing an existing building in that the building Cost of Building $4 , 9 7 0 , 0 0 0 $5 , 8 3 0 , 0 0 0 $6 , 6 6 0 , 0 0 0 $5 , 3 4 0 , 0 0 0 can be designed to fit the Purchaser’s needs. In t e r est Rate 6. 0 0 % 6. 0 0 % 6. 0 0 % 6. 0 0 % However, purchasing land and arranging and Ca r rying Cost/yr $2 9 8 , 2 0 0 $3 4 9 , 8 0 0 $3 9 9 , 6 0 0 $3 2 0 , 4 0 0 supervising construction is a time-consuming job TM I $4 3 5 , 6 0 0 $3 1 2 , 4 0 0 $2 9 4 , 4 0 0 $2 9 3 , 2 0 0 that might divert considerable attention from Total Annual Cost $7 3 3 , 8 0 0 $6 6 2 , 2 0 0 $6 9 4 , 0 0 0 $6 1 3 , 6 0 0 operating the business. Note that we have not allocated any costs for the Chart 5 — New Construction time and effort needed to acquire permits, discuss Toronto Mississauga Vaughan Pickering hase Build with the architect and the builder. Land cost/acre Lo w $2 5 0 , 0 0 0 $3 0 0 , 0 0 0 $4 0 0 , 0 0 0 $1 5 0 , 0 0 0 Making the Hi g h $4 5 0 , 0 0 0 $4 5 0 , 0 0 0 $5 0 0 , 0 0 0 $2 5 0 , 0 0 0 Comparison (Chart 6) Ave r a g e $3 5 0 , 0 0 0 $3 7 5 , 0 0 0 $4 5 0 , 0 0 0 $2 0 0 , 0 0 0 Based on our survey, building a new facility in Bu i l d i n g $4 , 0 0 0 , 0 0 0 $4 , 0 0 0 , 0 0 0 $4 , 0 0 0 , 0 0 0 $4 , 0 0 0 , 0 0 0 Pickering is the least La n d 1, 7 8 5 , 0 0 0 1, 9 1 2 , 5 0 0 2, 2 9 5 , 0 0 0 1, 0 2 0 , 0 0 0 expensive. However when De v ’ t charge 23 , 0 0 0 56 1 , 9 5 8 41 1 , 0 0 0 27 2 , 0 0 0 you consider that costs for Tot a l $5 , 8 0 8 , 0 0 0 $6 , 4 7 4 , 4 5 8 $6 , 7 0 6 , 0 0 0 $5 , 2 8 2 , 0 0 0 various types of property can vary considerably, In t e r est Rate 6. 0 0 % 6. 0 0 % 6. 0 0 % 6. 0 0 % even within a Ca r rying Cost/yr $3 4 8 , 4 8 0 $3 8 8 , 4 6 7 $4 0 2 , 3 6 0 $3 1 7 , 5 2 0 municipality, there is TM I $4 3 5 , 6 0 0 $3 1 2 , 4 0 0 $2 9 4 , 4 0 0 $2 9 3 , 2 0 0 ughan Pickering little difference between Total Annual Cost $7 8 4 , 0 8 0 $7 0 0 , 8 6 7 $6 9 6 , 7 6 0 $6 1 0 , 7 2 0 various options.

5 he r e are disturbing signs that co n s i d e r ed crucial in the reg i o n a l the world is on the verge of a plans on which I worked 40 years global depression. If so, the In t o ago! This will contribute to challenges to the current struc t u r e economic and competitive prob l e m s of our society, Confederation, in the major cities and urban urbanism, and rural life, will be de p re s s i o n regions. On the other hand, ve r y demanding. el e c t r onic commerce and education At the same time, there are always may help allow new responses such possibilities, even in a depres s i o n , & beyond as “planned scatteration” of grow t h and I am sure that Land Economists among smaller urban centres with will rise to the occasion! good infrastruc t u re . by Norman Pearson PhD, FISA, q Gr eat struggles over the The emerging global depres s i o n FRTPI, PLE, AICP, MCLP In essence, the problem is very simple: em p o w e r ment of local and reg i o n a l surplus capacity and a shortage of go v e r nments, and the waste of customers. q Impossibility of the US Federal passing tax monies up and down the Re s e r ve propping up the economy New markets such as China are grow i n g Federal struc t u r e. Canada is no q A bursting real estate bubble and ra p i d l y . As a main focus for forei g n longer a rural country where tax falling house prices investment, they are poised to increa s e res o u r ces have to be centralized in global capacity and strip wealth from Beyond the upheaval, Kondratieff to pres e r ve stability and Eu r ope and North America. pr edicted a 30-year boom. The prob l e m build a welfare state. Tod a y , it is is getting there! highly urbanized with dramatic When trade barriers dropped, it was variations in regional needs. assumed that capitalism, market Implications for Canada q Much concern over the survival of economies and democracy would sprea d While the Canadian economy has perfo r - small rural municipalities. Rural almost automatically. This did not med better than the other G-7 nations populations will age rapidly and drop oc c u r . Instead, huge areas of the globe (+3.6% in 2002), note that inflation was sh a r p l y , and we may discover that (Russia, Africa, much of Latin America, 4%. Since we are heavily dependent on th e r e is great difficulty in re- s t a rt i n g pa r ts of Asia, and most of the Islamic trade, global depression could have urban places effectively stifled by nations except Turkey) are full of people significant implications, including: ea r l i e r , rev e n u e - p u s h e d stuck in feudal, authoritarian and often p Gr eat difficulty sustaining the hugely amalgamations. co r rupt regimes, with no capacity to popular welfare state (an aging le a r n how to create wealth. The population, reduced revenues). That With everyo n e ’ s attention on survi v a l , domestic product of the entire Russian likely means increased tax burde n s the biggest challenge may be to Federation, for example, is the same as on younger taxpayers — a recipe for remember – and plan for – the coming the State of Illinois. social unres t . mi d - c e n t u r y long-term economic boom, so as to avoid the “crash programs” of Until we solve this dilemma, we are q Gr owing turbulence within the 1950s and 1960s. st a l l e d . Confederation, as demands for more Long wave theory su p p o r t for the “have not” Prov i n c e s Challenges for Land Economists We may, in fact, be at the end of the 65- meet increasing resistance from Th e r e is an urgent need for theoret i c a l 75 year Kondratieff “long wave” – a time Ontario, Alberta and British development, based on thorou g h when war and depression are forecast to Columbia. res e a r ch, to understand and help society evolve into a new era. We also need to last several years until new technologies q In t e r national competition, driving change our educational system to a new and economic activities replace the old down labour costs, and fuelling a paradigm, which teaches people to and outmoded. need for younger immigrants. cr eate wealth for themselves, rather Unions will find themselves under Judging by the history of major than be dependent on governm e n t . economic depressions, we might face pre s s u r e as plants close. Land Economists are an integrative the following: q Widening economic and social gaps, pr ofession. I suspect we have a huge rol e as deflation allows the cash-rich to q Nu m e r ous wars, possibly triggering to play in the 21st Ce n t u r y, both in the pick up goods at ten cents on the upheavals in the Middle East and de p r ession and in the boom time do l l a r , while those in debt get S. E . A f r i c a be y o n d ! q New lows in the stock market and po o re r . gr eat destruction of wealth in a q Ongoing neglect of urban Dr . Norman Pearson is an interna t i o n a l climate of deflation in f r a s t ru c t u r e. Tod a y , despite special planning management consultant, and q In c r easing energy prices funding, we’re not even keeping up Dean of the College of Business and q Weakening US dollars as Middle- with the past two decades of neglect. Political Studies, Greenwich University Ea s t e r ners dump the curren c y And we’re still trying to build roads (Australia, Hawaii and Californi a ) .

6 Add the aole.org website to your marketing plan! by Konrad Koenig

One of the benefits of being a member The entire Membership list can be of our Association is the exposure you sorted by Last Name, Designations, get on internet search engines. Company, City, or Primary Practice Area (click on the headers). Search engine submissions for the Land Economists are done every 90 The individual pages are even more email [email protected] to request days to maintain a reasonable ranking useful. You can craft your own it. When you have updated your record with majors like Google, Yahoo, description of professional services to the way you want it, be sure to click Altavista, Metacrawler, Dogpile etc. etc. include terms or phrases that will the SUBMIT button. attract clients’ attention. It makes sense for members to have It makes sense to market your services their contact information and their Members can upload their information economically. The web is an excellent personal descriptions current, so they 24 hours a day, seven days a week from vehicle and the business exposure from can benefit when potential clients type ANY computer with an internet our Association will benefit you. in specific search terms or names, and connection. On the Members page, Konrad Koenig is 2002-2003 President visit our website. click “update your record”. If you have of the Association of Ontario Land forgotten your Username and Password, Economists.

The Legislative Beat continued from page 8 safety, consumer protection and q retail sales tax rebates for high- The province nuisance control. Section 160 of the efficiency appliances will retain Act, however, enables the Minister of the authority q emission caps for power stations Municipal Affairs and Housing to burning fossil fuel to cap water exempt self-regulating businesses from and sewer all or any part of a municipal business q proposed 10 per cent reduction in rates but the Minister of the Environ- licensing by-law. electricity consumption by the ment can permit a municipality to province’s own operations, with a On November 25, 2002, the Municipal exceed that cap in special circum- target of 20 per cent of electricity Statute Law Amendment Act, 2002 was stances. Accompanying Regulations usage from renewable sources passed by the Ontario legislature in must still be drafted. order to improve the financial account- Sustainable Water and Under the umbrella of the Clean Water ability for candidates in municipal and Sewage Systems Act Strategy, the government has also school board elections. On December 13, 2002, Royal Assent passed the Safe Drinking Water Act, Alternative Energy and Fuels was given to Bill 175 following 2002 – which provides legislative While the handling of the hydro file committee hearings at Queen’s Park, authority to implement 50 of the 93 remains a contentious issue, there is a Ottawa and Walkerton. recommendations in Justice O’Connor’s concerted effort by the Tories to become Spurred by Justice Dennis O’Connor’s Part Two report. ‘greener’. Alternative Energy Part Two report of the Walkerton Th e r e will be req u i r ements for: licensing Commissioner Steve Gilchrist provided Inquiry, it requires municipalities and accreditation of laboratories that a year-end progress report on numerous (“regulated entities”) to prepare Full test drinking water; certification and government initiatives: Cost Reports and Cost Recovery Plans training of operators; an owner’s licence, q tax incentives for producers of for the provision of water and sewer and a statutory standard of care for clean power (e.g., 10-year services. A late amendment enables municipal water systems. corporate income tax break for municipalities to finance activities new electricity generation fro m related to watershed-based source Andy Manahan is Development renewable energy sourc e s ) protection as long as the costs are Promotion Representative, Universal linked to the delivery of water and Workers Union, Local 183, and this q tax credits for individuals wastewater services. Association’s Legislative Chair. purchasing solar panels

7 House in Recess savings be passed on to tenants The Ontario Legislature starts The under the provisions of the sitting again on March 17. Tenant Protection Act. January New Minister of Municipal 1, 2006, would be the deadline for Affairs and Housing Legislative Beat full implementation of this Hon. Helen Johns, MPP for recommendation by Huron-Bruce, has been named municipalities, except Toro n t o Interim Minister of Municipal would be given another four years Affairs and Housing following to fully merge the two prop e rt y Hon. Chris Hodgson’s classes in recognition of its announcement on Jan. 8 that “unique circumstances”. He also he would step down to spend notes that the burden of this tax more time with his family. He shift should not fall entirely on will continue to represent the the residential class but across all riding of Haliburton-Victoria- pro p e r ty classes. Brock until the end of the Statute of Limitations current mandate. Johns will In December, the House passed retain her position as Minister Bill 213, the thre e - p a rt Justice of Agriculture and Food. Statute Law Amendment Act. Provincial Election This allows lawyers’ contingency Readiness fees, recognizes management In anticipation of an election accountants and certified general call, both the Liberal and accountants, and includes long- NDP parties have released NDP leader Howard Hampton also sought changes to Ontario’s limitation agenda documents. Liberal leader focuses on housing issues by periods for legal actions. Dalton McGuinty has proposed: recommending a two-year rent freeze It sets a standard two-year period for q Creation of a permanent greenbelt of or a rent rollback to 1998 levels (plus st a r ting most actions, counting from 600,000 acres around the Golden inflation). Local councils could opt when the claim is discovered. More Horseshoe in order to curb urban out of this plan where the vacancy im p o rt a n t l y , it sets an “ultimate limita- sprawl. The Urban Development rate has exceeded three per cent for tion period” of 15 years for most actions. Institute/Ontario is critical of the three consecutive years. Today, there is no ultimate limitation – establishment of urban growth Property Assessment and which leaves people with an open-ended boundaries as this would increase Classification Review potential of being dragged into lawsuits. housing costs and foster leapfrog On November 29, 2002, Ontario’s development. When proclaimed, the 15-year period Finance Minister Janet Ecker released will start from the time the work was q Repeal of the current Ten a n t MPP Marcel Beaubien’s phase two actually done, so everyone will know Pr otection Act, which was report on property assessment and when it has ended. Exemptions include implemented by the Tories in 1998. taxation issues. (The first report was u n d i s c o v e red environmental claims. The reinstatement of rea l rent control s delivered on April 2, 2001 to then is contemplated in the “Grow i n g Finance Minister .) Municipal Act/Elections St r ong Communities” Liberal Everything from car dealerships to The new Municipal Act went into effect document. Rent controls would floating homes to pipelines is covered on January 1, 2003. A searchable remain in place wherever vacancy rates in this latest document, including electronic guidebook is now available at remain below regional thresholds (e.g., recommendations on: www.mah.gov.on.ca which will th r ee per cent). eventually cover all 18 parts of the Act. q treatment of small business A regular review of the Act will occur In an open letter to McGuinty, the Fair properties every five years, beginning in 2007. Rental Policy Organization called the q scope of the definition of the The new legislation gives municipalities Liberal “challenge” to investors to industrial property class “build your way out of rent control s ” broader “natural person powers”, and ab s u r d, as legislative stability is q methodology of assessing farmland recognizes a number of spheres of paramount to encourage private ren t a l and classification of farm buildings jurisdiction; however, municipal co n s t r uction. Beaubien also recommends combining authority to impose taxes, fees, charges, incur debt or make investments is still q No new taxes. In a speech to a local the multi-residential prop e r ty class with the residential class, and red u c i n g governed by specific, more prescriptive chamber of commerce, McGuinty sections of the Act. envisioned that $3.5 billion in municipal tax rates for multi-res i d e n t i a l savings could be found by managing to the residential rate. With the goal of Municipalities have authority to license spending more prudently than the enhancing fairness, he furth e r businesses for purposes of health and To r i e s . recommends that any prop e r ty tax See Legislative Beat page 7

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