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Spring/Summer 2002, Vol LandLandThe EconomistEconomist Sp r i n g / S u m m e r 2002, Vol. 32, No.2 Municipal competitiveness . 2 New study is helping municipal- ities to align property taxation policies with economic initiatives. New members . 3 Cultural renaissance on hold? . 4 Since the Ontario govern m e n t ’s unilateral commitment to fund cultural projects, many people have been wondering when the Federal Liberals will follow suit. Opportunities for developers and investors . 6 First Gulf Group vice pres i d e n t Mike Hanna forecasts shifts in the real estate sector. News briefs . 6 Canada to top growth • Data on gr een roofs • Healthy investments • TO housing starts rec o rd ? Pr ofession of the Land . 7 A look at the Association’s beginnings. Honorary lifetime members . 7 Gerald Young and Alan Mott have been given special honours for their dedication. Legislative Beat . 8 New Premier and Cabinet • SGRO Re p o r t • Tenant Protection Act Th r eatened • Oak Ridges Moraine Pr ofessional Journal of the ASSOCIATION of ONTARIO LAND ECONOMISTS 1235 Bay Street, Suite 500 Toronto, Ontario M5R 3K4 Tel: (416) 934-5166 Fax: (416) 934-5021 Website: www.aole.org E-mail: [email protected] Municipal competitiveness by Jim Bruzzese CGA, PMM and Catherine Minshull MBA, BComm Pr ovincial policy changes over the past recently that, for many municipali- • general statistics five years have had a significant impact ties, the impact was in fact not • tax policy analysis on municipal budgets, municipal revenue neutral. • relative tax burden using “like decision-making and ultimately the pro p e r ty comparisons”, and 2. The province-wide, regularly updated amount of prop e r ty taxes paid acros s • review of programs that prom o t e pro p e r ty reassessment improved the Ontario. A new study developed last year economic development. tr a n s p a r ency in the tax system and is helping to quantify and compare pr ovided the ability for taxpayers to Working in conjunction with Colliers res u l t s . make comparisons acros s In t e r national and Municipal Prop e rt y “This study has helped municipal municipalities using the same base Assessment Corporation, BMA analysed decision-makers to identify the factors year values. It also produced some a sampling of prop e r ties from each that impact prop e r ty taxes within each la r ge shifts in relative tax burde n . mu n i c i p a l i t y , across 14 prop e r ty types, mu n i c i p a l i t y ,” says Shaffee Bacchus, 3. New municipal tax policy tools to create a database in excess of 2,000 Commissioner of Corporate Services for pe r mit the shifting of tax burde n s pro p e r ties. The relative burdens for the Regional Municipality of Niagara. “It between classes of prop e r ties. These each prop e r ty type were calculated, also has been useful in aligning prop - include the ability to establish a including prop e r ty-based taxes, and er ty taxation policies with economic number of optional classes in the typical water and hydro consumption. development programs and initiatives.” Co m m e r cial and Industrial classes, Highlights Conducted by BMA Consulting, the ti e r ed tax rates, phase-in policies and T h e re was a large range in the Municipal Competitiveness Study aros e the ability to change the relative tax “richness of the assessment base” out of municipal concern about the bu r den between classes of prop e r ties. a c ross the surv e y. Assessment per impacts of provincial policy: 4. Education rates for Commercial capita ranged from a low of $41,000 1. The transfer of additional servi c e s and Industrial properties are far in Brantford to a high of $125,000 in and costs from the province to from uniform across Ontario. the City of Vaughan. Ty p i c a l l y, municipalities had varying impacts See Graph 1. municipalities with poor assessment bases tended to have less flexibility in ac r oss the province. While the The 44 municipalities surveyed for the ex e r cise was intended to be rev e n u e their tax policies, and tended to place 2001 study comprise more than 50% of a higher pro p o rtionate municipal tax neutral, an independent auditor the Ontario population. Analysis was hi r ed by the province indicated b u rden on their Commercial and un d e r taken in the following areas: Industrial pro p e rty classes. Graph 1 Municipal spending on a per capita basis ranged from a low of appro x i - Co m m e r cial Education mately $550 in Norfolk to a high of 3.0 Tax Rates $1,100 in Niagara on the Lake. Spending did not follow pre d i c t a b l e 2.5 p a t t e rns in terms of population, g rowth, or richness of assessment 2.0 base. It varied as a result of factors such as diff e rences in service levels, 1.5 locational factors, social assistance, and GTA pooling costs and user fee 1.0 policies. Municipalities with the highest level 0.5 of building permit activity included Vaughan, Richmond Hill, Niagara-on- 0 the-Lake, Markham, Mississauga and O a k v i l l e . For the majority of municipalities included in the survey, a significantly higher tax burden is placed on Multi- 2 Graph 2 Residential Loans Program, supported by a $10 million interest free line of cred i t , Ratio of Commercial aims to encourage almost 600 new dwelling units in the core on prop e rt i e s 2.5 to Residential Taxes 2001 fo r merly occupied by offices, wareh o u s e s or vacant sites. 2.0 “Our downtown programs are important 1.5 implementing features of council’s plans for the renewal in the core area of the 1.0 city,” says Ron Marini, Director of Downtown Development. 0.5 Future Studies The Municipal Competitiveness Study 0 “enables municipalities to identify their competitive strengths and weaknesses,” says Michael Real, Senior Consultant with Colliers International. It ultimately creates benefits for taxpayers, “as areas of weakness are addressed through the implementation of effective tax policy initiatives by the municipality.” residential, Commercial and Industrial Typ i c a l l y , municipalities with older urban properties compared to Residential ce n t r es and with slower growth patterns For 2002, the study is being updated by properties. tended to employ a wider range of BMA Consulting and expanded to include incentive programs. In the City of additional municipalities. Features are Graph 2 reflects the tax ratios for the Hamilton, for example, programs include being added to make the database Co m m e r cial class for some of the an Enterprise Zone with Tax Increm e n t a l accessible by the client municipalities in municipalities included in the surve y . Financing, a Downtown Residential a user-friendly manner. Some municipalities such as Chatham- Loans Program, waiver of all application Kent, Ottawa, Durham and Hamilton fees in the downtown, incentives to Jim Bruzzese and Catherine Minshull are have established optional classes (Office im p r ove building facades within Business pa r tners of Bruzzese Minshull & Building, Shopping Centre, Parking Im p r ovement Areas, and incentives to Associates – Management Consultants lot/Vacant Land and Large Industrial) to im p r ove heritage features of designated (BMA Consulting) www.bmaconsult.com address specific assessment-related heritage buildings. The Downtown issues. Relative burdens reflect significant differences in assessed values, the level Welcome New Members! of municipal taxation, differing education tax rates and tax policy Sean Allen MIMA, PLE Jonathan Hack MRTPI, CIP , decisions. For example the relative tax KPMG LLP RPP, PLE burden for comparable properties in the 519-747-8873 IBI Group Neighbourhood Shopping Class ranged Kevin Antonides BES, AACI, PLE 416-596-1930 on a square footage basis from $2.15 in Jacob Ellens & Associates Bradford J. Kelly AIMA, PLE Kitchener to $5.25 in Hamilton. 905-945-8821 Municipal Property Richard Atkinson AACI, PLE Assessment Corporation Development inducements vary from 416-480-2728 905-576-8563 city to city. Municipalities have creatively developed programs such as: Theodore J. Cieciura HBA, MSc, Brian Posey AACI, PLE • municipal land assembly MCIP, RPP, PLE Mackenzie, Ray, Heron & Edwardh • business incubators Design Plan Services 416-591-1515 • business retention programs 416-626-5445 Guy Wilson AACI, PLE • downtown/area specific programs Dominic Fiorda AACI, PLE Colliers International Realty • heritage programs Rajesky & Associates Advisors Inc. • brownfield redevelopment 905-763-9990 416-643-3707 • development charge exemptions and/or credits. 3 Cultural renaissance The first project out of the gate is Roy Thomson Hall. It by C a r closed to the public in March, and will open in August with mu c h - i m p r oved acoustics (the subject of long study and ince outgoing Ontario Premier Mike planning). Assuming the federal contribution appears, it will Harris made his unilateral announcemen also have a refurbished lobby, and new sponsor and donor Son cultural project funding this spring, a lounge. The $24 million enhancement project is being lot of people have been waiting breathlessly fo overseen by Tor onto architects Kuwabara Payne McKenna the other shoe (filled with the federal millions Bl u m b e r g (KPMB) and acoustic expert Russell Johnson.
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