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REPORT TO COUNCIL
FROM: (iillis Paterson DATE: Jnnuary 16,1998
Director of Finnnce
REPORT NUMBER: TR 01/98
SUHJECf: 1998 Interim Tax Lcvy Billing
RECOMMENDATION:
Thnt lhe Exccutivc Committce rccommend to Council that:
1) for the 1998 Interim Tax billing, the mill (tax) rnte for Commercinl/Industrinl pucposes be
incrcased by 30 per cent to ptuliully compensatc for thc loss in revenue prcviously
collccted under thc Business Occupnncy Tnx;
2) the finul dcterminntion on the rccovery of rcvenue lost due to thc climination of thc
Business Occupnncy Tnx be defcrtcd to u future dnte; �
3) the mili (wac) rntcs to be npplied, represcnting 50 per ccnt of thc 1997 rntc for residcntiai
purposcs and 65 per ccnt of thc 1997 rate for cammercial nnd industrinl purposes be approved;
Residcntiul and fiartn: 55.59 mills
Commcrcial and Industrinl: 85.02 miils
4) thc attachcd byluw, providing Cor the imposing of the miil mtes npproved under
Recommendntian 3 ebove, be rcnd ihrce times and pnsscd; and
5) lhe appropriute officinis of the Town of Pickering be authoriud to give ef(ect thcreto.
ORIGIN: To provide n menns, under Provincial Legislation, to replaca, for the intcrim
billing only, the revenue lost as a result of the eliminntian of the Business
Occupancy Tax nnd to approvc tha mill (tux) mtes.
AUTHORITY:
The Municipal Act, R.S.O, 1990, as nmended:
The Fair Municipal Finnnca Act, Part [(Bill ]06) nnd Part II (Bill 149)
FINANCIAL IMPLICATIONS:
As the Town will nal be callecting as much ns under previous interim Billings, duc to the ellminntion
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of the Business Occupancy T�, 1998 interest incona may be reduced or temporery borrowing
expenses may be increased, depending upon the timing of payment dates to the Region of
Durhem end the Board of Education.
HACKGROUND:
At its meeting of December 22,1997 Council approved Report #22/97 of the Director of
Finance which provided for an Interim Levy for 1998. ]t was noted in the report thnt u
greot deal was unknown at thut time in regards to dewils of Provincial intentions nnd
legislation surrounding ihe implementation of the Oninrio Fair Assessment System and the Fnir
Municipal Finance Act, Perts I and fI. Council provided smff with the authority to undertnke un
interim billing based upon Icgislntive authorities and any npplicuble Provincinl directives in
effect nt the time of Oie muiling of the tax bills with the proviso thnt such an interim levy not
exceed 50% of ihe prior yetu's tnxes.
Since thnt time stafT hava had several discussions with lheir counter-psuts in some of the
municipalities in the Region of Durham, in other Onitvio municipulities nnd in the Provincial
govemment At the risk of undcr stntement, unceriainty and confusion is common.
During the wcek oflanunry 5, 1998 the atwched c,rrespondence wns receivcd Gom the Minister
of Municipal A(�airs. Summurizing greatly the P,egulation provides for:
1. farm properties om to be taxed at 25% of Ihe 1997 rcsidentinl mill rale;
2. menaged forests arc to be tuxcd nt 12,5% of thc 1997 rcsidential mill rate; and
3. conservntion lunds arc to bc tnxed at 0% of the 1997 rcsidcntial mill mte.
Previausly farm lands werc taxed nt the full mtc with an ofl'setting 75 per cent rebute being
provided by thc Province leter in thc yenr.
These items are nlso made npplicable to the i998 Interim Levy, a chnnge thnt wns prcviously
unforeseen.
Bu�fnas Occupancy Ta:
The Fair Municipal Finnnce Act (Bilt 106) amended the Assessment Act eliminnting the
Business Occupuncy Tnx (B.O.T.) ettective ]anuary 1, 1998. Previously, the occupants of u
property carrying on business paid a B.O.T. equnl to a percenwge oF the real property assessment
as follows:
Distillers, Brewers, Insurance Companies, Bnnks, Credit Unions etc. 75%
Msnufacturing, Smelting 60%
Retail Stores (more then 5 stoces) and most Professionala 50%
Smnll Business, Rncc Trnck 30%
Car Potks 25%
In.1997, Pickering received approximately_ 56,9 mlllion in B4O.T. for the purposo of thc Town,
t�c Ragion of Aurham ond lhe School Bonrda with roughly half or 53.4 million recovcred on thc
Intedm Bllling.
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In 1998 and future yenrs, {he B.O,T. will be eliminated, which means lhat the lost rcvenue will
have to be recovered from ather taxpayers in ihe Town. Undar Provincial legisletion, the Town
hos the authority lo dctennine the means of recovering this revenue from the various classes of
property taxpayers: It is proposed that this determination be postponed until aU remaining detnils
and affects of implemenmtion of Q�e Onterio Fair Assessment System are known.
As an interim mensure, the recommendation provides for the recovery af this lost revenuc Gom
the same clesses of property tuxpayers, nlbeit from lhe owner relher lhan lhe occupunt or tenont.
It is presumed ihnt the propeRy ownets will recover the ndditional tax pnyable from the tenunts
who will experience the benefit of ihe eliminntion of the B.O.T. This nction is pertnissuble under
the Fair Municipal Finance Act.
The recommended adjustment of 30 per cent to the cammercinUindustrial rnte will producc
laxation revenue of npproximntely 52.3 million thereby offsetting, to the greater degrea, rcvenues
lost (53,4 million) as n result of the climination of the B.O.T. Duc to timing differences between
when the interim tnxes are Icvied in Pickering, when the Rcgion and School Bourds portions are
tumed over to them nnd the final levy dntes of all bodies, therc muy or mny not be in an incrense
in the Town's 1998 budget for temporary bortowing expensa or u decrcase in the budget for
interest income.
The coaespondence was nlso rcferred to Vailtech, the campany writing und implementinp, the
new Wx billing system. As you cnn appreciate, these chnnges and lhe timing of thcir relense �nly
compound the difTculties of the tnsks nt hnnd.
The uttached insett to accompany ihe Intcrim Tax Bill bcing mnilcd around thc end of Janunry is
provided to you for your infortnntion. Thc front of thc inscrt provides n bricf discussion of thc
current situation while thc revcrsc sidc conwins informntion in rcgards to pnyment, t5c samc as
thet providcd in previous ycnrs.
Finally, also atmchcd for your infotmation is u pnper from thc Ministry of hfw�icipal Affairs
which mny assist in your understanding of much of thc foregoing.
ATTACHMENTS:
1. Letter from lhe Ministry of Municipal Affairs, dated Deccmber 24,1997.
2. By-Luw #
3. Interim Property Tux Billing InseR.
4. New Properry Assessment and Taxation System in Ontario.
' . Giilis A. Paterson
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Copy: C3eneral Meneger A' J,o N
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D ember 24, 1997 `. � � �'�, �� ' ;
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Dear Head of Council: '��
� I am writiag to meke you aware of recent reguladons relating to your locai interim tax
billing and other issues. •
'(y� TaY e'redi� cn Cmate ?06+ Act (Bill lri4) emends thG Mn++i�pai_ Aet t0 allOW the
Minister of Municipal Affnirs and Housing to establish the iuterim levy on fazmlands,
menaged fonsts aad conservadan lands. As you are aware, oligible farmlands and
eligible managed fonsts will have a tax rau of 25 pu crnt of the nsidwtial rate and
consecva6on lends will be exempt from taxatioa Uniess same adjustment is made,
municipalities could potentially c6arge owners of these types of properties more on the
interim bili than they would actually owe in tatel taxcs for the yeer.
To deal with the situation, the ngulation allows municipali6es w levy no more than 25
per cent of the nsidential mill rate levied ia 1997 an all ferm properties, except those
properties idwti5ed as fazmhouse aad the one acn of lend around it. These aze
desig�tated as FL on the inte:im billing tapes. On those propaties wtrich are cligible far a
meaaged forest nbau unda the Menaged Fonst Tex Rebate Prog�am — those designated
es MF on the intesim billing tapes — municipalities may Icvy no more then 12.5 per cent
of the residendal mill rate levied in 1997.
The ngulation also nquires that municipali6es not Icvy intecim taxes on eligible
conservadoa leads. These are designated as CL an the intuim billing tapes.
I am encloung a copy of the ngutation which also affecb Bnsinas Improvemeat Aress.
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Head of Council
the timing of municipal tax rados and the timiag of the uppa tier tax levy, If yau have
any questions, please call Ms. Nancy Bazdecki, Directar, Monicipal Finance Branch, at
(416) 585-6951.
Sinarcly,
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Leach
Minister
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Guetteda Nu d O
C��'IDEj�'jAT, N0737. E/MA-MQN-17-RM
Datil lilad aith ths 2-Idf
R�giatrar o! Ragulatioae
RSCIII.�TSON M�DS 9��t T�
IWNICIYLL aCT
„�,,,. T71Z &�T� iATl'EA3
1. For the puspoae o! aection 220 0! the Act, the coa�ercial
property claee and tha iadustrial property claea preacribed under
the Asaesameat Act ara the bueineae property claeeea.
1. �or the purpoeea o! eube�ctions 363 (3) aad (4) o! ths
Act, the last date !ar a muaicipality to eatablieh tax ratioe Lor
1998 ia exteadad to May 31, 1998.
3. Por the puzpoaea oi aubeectionn 366 (2) aad.(3) o! the
Act, the last data far aa upper-tier muaicipality to paee a by-
lAw directing laxer-tier municipalitiee to lavy tauc ratae ia 1998
ia extendad to May 31, 1998.
4. Por the purponea oi paragraph i.i o! aubsectioa 370 (9) o!
the Act, the prescribed percentage ie,
(a) 25 par ceat o! tha residaatial mill rxte !or prop�rtiee �
� xhich are daaignated as 'PL' aa the 1997 asseaement
roll ae last revieed by the aseeasmaat coamieeionar for
the puspoane of the 1998 interim levyJ
(b) 12.5 per cent o! tha rssideatisl mill rate !or �
propertice ahich ara deeigoated an ■t4�■ oa the 1997
aueeeameat roll as laet revioed by the aseaeement
co�iasioner !or the purpoaae oi ths 1998 iaterim lavyj
(c) zero per ceat o! tha raiidantial mill rate !or
propertiee which are da�ignated as ■CL• oa tha 1997
. aeeesement roll ae last revieed by the aeeeeamenC
� coam�iseiaaer !or the purposea oE the 199D interiat lsvy.
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� S. Thia R�gulatioa com�s Sato lorc� oa Jaauary 1, 1998.
Miniates ot lair�� ouaiag
Dated oa !Ve�m a?f....2 �.. 1997.
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TOWN OF PICKERING
1998 fotedm Properly Tp: Bili
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As you hava probably become aware of ttvough verious news reports over the last year,1998 is going to be a
year of significant change in municipal finence. Provincial govemment initiatives such as lhe Who Dces
What panel, downloading of previously Provinciol costs, the implementadon of ihe Ontario Fuir Assessment
Systcm end chenges ta education financing, ore not only gaing to praduce chenges in who pnys for what, but
how much they pay. Mnny details of these changes are still being put in final fotm by the Province and will
become avuilable during 1998. Until thal time we will not be eble to determine the ef�ects on individual
properties.
As a result, the Interim Billing does not reflect any of the foregoing.
The Interim Levy, paid in inslalments in Februnry and April is u inx bill based upon the prior year's
nssessment end rntes of wxation that is sent out to provide revenue essentiul to the ongaing operation of yaur
Town, the Region of Durhem and the School Boards, prior to the Cowicils and Boards actually establishing
budgets for lhe current year. Later in the year, when Council approves tho annunl budget, a final tax bill is
issued. This Intcrim Levy is deducted from the final inx bill with the bnlnnce usunlly collected in June nnd
Se��e�;ber.
The 1498 Interlm Levy fot lhe majority of property owncrs is no di(fercnt from lhat of prior yenrs.
However, lhere are hvo aigoiticant changea far apecific claasea af properly be(ng implemented now, as
part of t6e Ontario Fair A�ac�ement Syatem.
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In prior yenrs farm lands were tnxed ut the totnl residcntinl mte offset by an
approximate 75 per cent rcbnte Gom the Province. Thesc lands will now bc taxed at
25 per cent. The net cost of taxation on farm lands ovcr ihe course of thc ycar is,
therefom, unchanged. Fam� houses and 1 acrc of land will continue to be inxcd at the
fuil residential mte.
CommerclaU/nJnsfrla! Properlies
Previously, most operetoro of commerciaVindusUinl businesses were required to pny
u Business Occupancy Tnx. Effcctive Jnnuary I, 1998 this tax has been climinated
by the Provinciul Govemment. While thc melhod of replacing this lost revenue is
still to be uddressed by Council, they heve decided thet, for the pwposes of thc 1998
Interim Billing, it will be recovered itvough the realry (properly) tax paid by thc
owner.
Implementation of the Ontario Feir Assessment System will be convolled by the Province during 1998 and
nil municipnlities in Ontnrio will be imdergoing the same changes in ossessment and Inxation nt the samc
time. The final tex bill will retlect the new nssessments, downloading, changes to education tnxaGon on
residential propeRies and the 1998 budgets of tha Region of Durhem, Bonrds of Education and the Town of
Pickering.
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TOWN OF PICKERING
_ : 1998 TAX INRORMA7701(
The cncloud IIVTERII1i taic bill is peyablo in two nearly equei instelmenb on Februiry 24,1998 end Apri127,
1998.
A FINAI, tnx bill will bo sent out for tho full yeer'a te�ces, J�,y tho emount of thls intcdm bill end will agein bc
payabla in two nearly equal instalmenis on June 25,1996 end 3eptem6er 25,1998.
Tho instalments on tho FINAL bill wiil bo higher then those of the interim bill as Ihcy will inciude ail 1998 tax
adjusUnents (if epplicablo) for the year for tho Fducation Systems, tha Region of Durham and the Tawn of Pickoring.
Tha Town of Pickering is tha tax collector onlv for both of the Educalion Systems end ihe Region end dces nol in any
wny set thair retes nor approvo their expendituro or service levois.
If you aze not currently enrolled in the 10-Payment Pre•Authorized Plan or the 10-Payment Post-Dated Cheque Plan,
payment options nre as follows:-
BY MAIL
Meke your chequa payeble to the Tawn of Pickering and retum by mail in Ihe enclosed envelopc along with
lhe payment stub.
POST-DATED CHEQUES�
You may post-datc your cheque(s) to thc inslalment due date(s). Please writc the property roll number on the
cheque(s) end include the payment stub(s).
TEI.EPHONE BANIQNG
Realry texes only may be puid by telephone banking. Contact your financiel institution bmnch for further
infortnntion.
PINANCIAL INSTITUTIONS
Poyments cnn bc mede et any chertercd Unnk or Trust Company.
CMC COMPLEX
You mny pny your texes to the Cnshier on thc sccond floor bctween 830 a.m. and 4:30 p.m. Monday to
Friday. Plcase remembcr to bring thc enclosed tex bill. After hours, paymcnts (NOT CASH) may bc placed in thc
drop box located in the towcr between lhe Library and the Civic Complex.
MORTGAGE COMPANY OR AGENT
If Ihe cnclosed tau bill is to be paid by a Mortguge Company, pltasc forwnrd Ihe bill to them immedintely.
SERVICES CHARGES ON NSF/RETURNED CHEQUES
There is a 520.00 service chnrge on rclumed cheques.
LATE PAYMENT CHARGES
Lnte payment chnrges arc added on the first dey of thc following month on all unpnid instelments and on the
first day of each monlh thercafler. �'AYMETVTS ]Ni1ST �E RECEIVED AND PROCESSED BEFORE TRE
�ND OF THE LAST IIUSINESS DAY OF TNE PRECEDING MONTFi IN ORDER TO AVOID LATE
PENALTY CHARGES. The rnte is 1.25% for each month, or fraction thereof, subject to amendment by Council.
ENQUIRIES
Enquiries can be made in persan at the Financc Depnrtment, Pickering Civic Complex, One The Esplanede,
Pickering, ixtween lhe hours of 8:30 n.m, end 4:30 p.m. Mondey to Friday. Thc direct telephona number for Tax
Billing enquiries is (905) 420-4614 (Norlh Pickering (905) 683•2760).
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THE CORPORATTON OF TH . TOWN OF AI . PRINCi
9Y•LAW N0.
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Heing a bylaw to esteblish tho Miil Retes to be
applied for the 1998 Interlm Tex BiIH�g.
WHEREAS Council under Section 370 (8) and (9) of the Municipal Act R.S.O. 1990
as emended by Bills (O6, 149 and 164 provides thnt the Council ofa Iocal municipnliry muy, in
1998, before thc adopdon of the estimutes far the yetu, pass a by-law to lery on the whole of the
assessment for reAl proporty accotding to 1he last revised assessment rolc u sum not to exceed
lhet which would be produced by applying the prescribed percentage (or 50 per cent) if no
percentege is olhenvise prescribed of
(a) the total 1997 mill rnte to residential and ferm assessment;
and �- .
(b) if the notional mili mtes thnt the municipality is rcquired to cnlculate for commercinl and
industriul nsscssment and the assessment that for pipclines, rnilways, hydro corridors,
airparts and other such properties, and
WHEREAS no percentngcs have bcen prcscribed for the purpose of said subsection 370 (9) snve
and except for furm lands (FL), managcd forests (MF) nnd conscrvation lands (CL) undcr
Regulation 523/97;
WHEREAS the mill rnte for laxes on rcsidcntial and fnrtn ussessmcnt us sct out in this byInw
does not excced 50 per cent oFthc rcsidcntiul mill mte levicd in 1997 on such nssessmcnt in Ihe
Town of Pickcring;
WHEREAS the milt rutc for taxes on commereial nnd industrinl assessment set out in this by
law docs not excecd the mill rate thut would raise, on all the commercial nnd industrinl
assessment, more than 50 per cent of the toml taxcs reised on such assessment, including all
business taxes levied in 1997; nnd
WHEREAS Council at its meeting of Dccember 22,1997, pusscd ByLnw Number 5183/97
being a by-Inw to esinblish instalment due dates for the 19981nterim and Final Lavy.
NOW 7'FIEREFORE the Council of the Corporatian of the Town of Pickering HEREBY
ENACTS AS FOLLOWS:
In the year 1998 the rate levied undereach of Section (1) shall be us follows due und payeble in 2
insWlments, on the 24th day of February,1996 and on tha 27th day of Apri1,1998:
(I j A mill rate of 27.795 mills for properUes which are designated as "FL" on the 1997
ossessment roll as lest revised by the assessment cammis�ioncr for thc purposes of tha
1998 intcrim levy;
(2) A m!il rnte of 13.897 mills for properties w�Ich arc designated as "MF° on the 1997
nssessmcnt roll es leaf roviaed by the assessmcnt commissloner for the purposes of thc
1998 intcrlm levy;
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';' _. ;�(3) A mip.rete of uro mtlls for properties whtch aro dwignnted "CC' on the 1997 •
essessment roll as lest rovised by the assessment eommiasfoner for thc purposes of the
1998 tnterlm levy.
`(4) A mill rato of 55,590 mtlls for all other rosidential andn ferm propedies on the 1997
assessment roll es lest revised by the assessment commissionec for the purposes of tlu
1998 intorim levy.
(S) A mill rete of 85.020 mills for ali wmmercial and industrial properties on the 1997
essessment roll as last revised by the assessment commissioner for the purposes of the
1998 interim Icvy.
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BY-LAW rcad a first, second end third time end finally passed this day of , 1998.
Wayne Arihurs, Mayor
Brucc Taylor, Clerk
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' Mlnistry of MlnbWn d��
Muoklpd Athln AHdne munkip�bi
and Houdnp . �t du Coy�m�nt
Q Ontario
Municipal �nance Branch
13th Floor, 777 Bay Street
Toronto, ON MSG 2E5
Tel: (416) 585-6951
Fax:(416)585•6315
October 14, 1997
Mr. Gil Paterson
Metro �nance
Metro Hall
Stadon 1143
55 John Street, 14th Floor
Toronto, ON MSV 3C6
Deaz Mr. Paterson.
Attached please find a copy of the bulletin on the oew assessment and taxadon
system in Ontario. I would like ro takc this opportunity to thank you for your
contribudon to its development.
It is my belief that the documeat will help �aicipal staff, as weU us the geaeral
public better understand the substandal chnnges that ac�e being made to the
assessment and taxadon system
At this time all the decisions on the new assessment and properry taxadon system
have not been made. As discussed at the sessions, updates to the bulledn will be
published as decisions are made. Thank you once again for your participapon.
Yours truly,
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Nancy ardecld
Director .
Attachment
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A Bullet6n on the
New Property Assessment and
�Tazation System in Ontario
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Table of Contents
■ ■ ■ Introduetion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . n • l
Ezeeutire Summuy .. . . . . . . . . . .. . . ... . . . . . t3-i
The Onhrio F�ir A:sessment System . . . . . . . . . . . . . . . . C-2
Cl�:se: of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . � • a
' Ta: Ratios, Ran`es �nd Rates . . .. . . . .. .. . ... . . . C•1
Interim Fin�ncint ... . . . . . . . . . . . .. .. .. . . ... .. . F•1
Oeie`�tion af T+x N�tio Settina 8e:ponsibllitr . . . . . . . . . . G-i
Phase•in of T�x Ch�nt�s .. . . . .. . ... . .. .. . . . . • . . . H-1
Tax Re�lef for low Ineom� Seniors �nd LoN Income
Persons Wlth Dls�biliti�a . . . . . . . . . . . . . . . . . . . . . . i-i
The Simplified Ai��asment AvPe��s Proee:s .. ....... .. . �•i
Other li:uu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-i
Chronolo�r of Critie�l Munieip�l D�ei:lons �nd Drie: ..... L•1
Glos:uy ot T�rms . . . . . . . . . . . . . . . . . . . . . . . . . M•i
ADDendix � . . . . .. . . . . . . . . . . . . . . . . . . . . . N-1
.
Introduction
••■ This bullecin is intendcd ro pro�ide dccced municipal o�icials, municipal scatiand the
public ��ith informacion on Ontario's Fair Assessment Systam and the rcform of propcm•
casrs. Updatcs «�II be publishcd u more inform�tion on the nen� system becomcs ar�ilabic.
The bulletin is inttnded as a guidelinc. Rekr to the legislation or prospectivc Icgisl�tion
itself whan question: arisa
Ontario's nav Fair Municipal Finance Act (Bill I06) is intended to introduce a lair and
accauntable system of properry assessment and tication. The existing sysmm hu brought
about significant incquities in thc taxuion of propartics across the pro��ince, xitli sixeabla
vari�[ians in the nz burden: of ntcpayan awning similu propertics. The governmcnt is
corrccting this aituation by putting in plaa a more cquitable system �chich ��nald crcat all �
propert�• o�mm faidy. The s��stem uill also gire municipalitiu the auronomy thay need and
want ro nise « renues in enys that are bo[h fiir and rcsponsice to laal priorities and nccds.
Provinci�l properq� taz rcform� �rc sec out in Uill 106 and tiill 149. Itill 106,'Che Fair
hlunicipil Finance e1et, rcceieed Royil Assent on Atay 27, 1997. Genenlly, the portions ot
Bill 106 (Chaptcr 5 of the Statutcs of Oncario, 1997) dc�ling uith thc ncw assessmanc and
t�xuion schema become cflective on Decembcr I, 1997 (amendmants to the Asscssmcnt
Ace) and on Januuy l, 1998 ( amendmenu io ihe Dtunic�pal Act),
Bill 1�19, the Fyr �tunicipil Fnancc Act (No. 2) raccircd fint rcading on (unc 26, 1997,
and dabate on second rcading bcgm on Scptember 25, 1997 at �ehich time tha htinister
af Fin�nce indinted his Imcntion to make certain omcndmenu ro the Bill. As of �he
publicauoqof this documcnt the bill hu not praeeded through the Icgislamre.
Accordingly�, while this bulletin usumu the puugc of �he Bill with these amendmenes,
every e(1'ort is m�de to ad�tise the mder that commena respcccing Bill l49 and iu efl'ects
ate subject to the eill of Legisla[ure. The Ministtrs of Finmce and M1tunicip�l Aliain and
Housing will abo be relessing a number of regulations. Upd�tu to this bulletin ��ill be
published u legislation progresses md regul�tions arc releucd.
�Vheraver pouible, we have used plan languaga in �his bulleda eo ild undenranding. �Vhcre
words or expressions di(kr Gom those used in tht Iegislaqon and wherc quutions ans:, thc
sumrory language should be rckrred to.
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: . _ ,,-. ,; : _ _
�_
- Executive Summary
� . � � �� � ■'■ ■ TM1e Optarlo'Ralr M�e�sment-Eystem
►n many arws oFthe province, the assrssmcnt bue is sariously autdzted, reulting in
mnfusion and unfaimau for some taxp�gers. The ne��� Ontario Fair Assessment S�•stem
brings consistency ro asscssmrnt acrou thc pro�ince, leading ro a simpler, IIP40��I�IC
property taz system that is Icss msdy to adminisur.
The assusmcnt of land uill be bued on current ralue u meamred b�• the pria ehu �eould
be paid by a��illing bu�•er ro a ailling seller at arm's length. All propertics ��rll initially be
asscucd using lune 1996 wrrent ralues. Reuscs�ment updatcs aill be implemented in
2001 �using 1999 current ralucs) and 2003 (using 2001 current vilues) brti�rc mocing to
�nnual updatu (or 2004. '
. � Prop�rty Tax R�form
Thr nc�e properq� wz system ��till gi��e municipalitia the tools �hey necd m raise reeenuc in
a way �hat is liir ro �II t�xpa}'en and responsire to local nccds.
Cl�s��s ot Prop�►ty
Properties �vill be di�ided into seven st�ndard praperp� d�sses utablished by �he proeince.
Addition�l properq• cluses may be crcattd by the prorincc. Fach cl,us may be taxcd at a
ditl'ercnt rate subjcct to the f�imess proeisians outlincd belmv.
- � VaNabl• Cla�• Tax Rat�•
The term t�x rau replacu "mill rate". Tlu dilTerance beoeeen mill otr and ��s rate is �ha[
a tu r�ee expruscs the amount of wx ss a percentagc ol'uscssed ralue, �nc�raas a mill r�cc
rckrs ro the amount of tax for evtry 5I,000 of asscssmene. Municipali�ies ��ill ha�c the
abilin• to set di(ferent nx nta (or diflBren[ cluses of proparq•.
� . Tax R�tlo•
Tax raricn espress the relationship that the nx rue for wth propaey class in the
municipaliry bean ro the wx r�[a for the residentiil/farm properry cl�ss. The ns ruios nill
datermine the rd�tive nz burdens of euh properry clus. Tax raeios nill be eswblished bc
upper tier and single der municipiliries. Upper tien may dele�ate this authoriey ro thcir
lower eicr municipalicies subiat to cercain condieions.
�3 �.
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■ ■ � Tra�sltlon Ratlo•
In �hc first ycar ihc ne�r s�•stem comes inro force (i.e., the 199R wxa�inn year), the prorincc
uill cswblish �ax ci�ios for cach upper �ier or single tier municipaliry, ar pro�idc thcm �rith
a mcthod by �chich the ratios an bc calculated. Thcse ratios �rill be kno�cn as tnnsition
ratios.'fhcsc starciug points �vill enable municipalities ro shara taxes among.lasscs �mder
the nre• sysrcm in the same ��•ay �hat ther �erre sharcJ undcr the prior spstem. liusincss
clus (commercial or indusrri�l proprrry� elus) transition r�rios will indude the recenues
formcrir raixd by thc Rusincu Occupmc�� Taz.
� Tax Ratto Rantss (R�nda af Fairnrri)
Upper tier and single tier mwiicipalities ��ill ha�•e greaier tlesibiliq� in scuing tas ra�ios than
undcr tht exis�ing system. Ha�ecxar, municipallr•determined tax ratios must adlurc to the
ws ratio ranges (ranges of fairncu) �o be utablishrd by the prorince. If the transi�ion racio
for the municipaliq• falis outside the wx ruio r�ngc established by the procincc, thc
municipaliry mac maint�in the tr�nsidon ratio ur mme closer to the t�s raeio range.
Alunicipalicies �rill not be allo�ved ro set tac ratios �chich move (urther mvay liom the tax
ratia range. This nill prerent municipalities from shifting taxes on co properry• classes that
arc alrcady aeer wsed or off properq� claues that are nxed unfiiriy lo�r.
� Ellminatlon of Busln�ss Oaaupanay Tax
The Rusinus Occapan�y� Taz ( BO'P) no longcr makes sense in tcxf�y's rn�irmm�ant.
Outda[ed md arbitraq•, the BOT is �ht source of a luge portinn of municipalities' tas
arrcars, and municipalities and business have long ukeJ for in elimination.'fhrough thc
introductian of rariable cl�ss nx nrcs, municipalitics an choose to recorer municipal
rerenue equi�•alent ro that raised �hrough the BOT from my or all properry classes in the
form of realry nz an proptrry� ownus. The total nxes on the properties in the earious
properq� cissses ��ill still haee eo conform ro the pro�tincial nnge: of fairness.
. � Slmpli(I�d Aue��m�nt Appeal• Proc�s•
The role play�cd by tht Ontario htunicipal Board in the propert}• asttssment appwls process
is being climinated. This «ill shorten and simplify the appeals pracu, sacing cosn. In
fumre, usessment appeal: uill be m�de only to the Assusment Re�ie�e Bwrd. Poinu of law
may be appaled ro the Courts.
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The Ontario Fair Assessment System
••• Tlu Ontario Fair Assessmcnc Svstem ��ill usns land and improremtnts to [he Imd on ihc
basis of the .urrcnt ��alue of the land on speciflc dars identificd in the Act. '1'his will bring
consistency and equiry ro Ontario's usassmrnt base. Thc tablc belo�e sho�cs the d�ys un
which land aill bc valoed for usessmrnt purpnses for tasuion �•cars, bcgim�ing in 199N.
I!!{ Cir�al nM w 1n 70� lMi
19l9 Csnd r�M ee In 70.1996
2000 Qmd nb� a)w 30� 199i
MOl hnal �M a la 70� 1999
2002 C�nd r+M ee Ar 30� 1999
200� prrad ti� m 1r 70� 1001
2001 Canal nM a Aa �0, 20W
20Q5 A�np d arad r+M oa Mr �0.2001� ad Ap 70� 200�
200i�IFP010 Anr+pdtareAnMwlwlOdtlrtlraPerbmten
(��. la IM I�utla �er 2001. asaud rir b tlr �roYe of
MII� 1�1 M �II �Or � �OW� i�i)
Optlon to A����s L�nd at Curr�nt Uss
Thcre may be simatiom nherc the price of I�nd may be morc reflecr.vc ol'the probable
� fumre ux of the properq� than its currant use. In such a simation, the Iand would likely sell
for a higher price �han iu currcnt use wauld indiata Tn enable municipilities ro addrcss
this situation, che �fininer of Finance may m�ke rcgulacions to proride tlia �he currcnt
value of c�rtain eligible lands be b�scd on current usc. These rcgulations may specify �vhat
land qualifies for this treatment and how long the land must haee been used in in currcnt
usc ro qu�lify.
Thue regulacions ��ill be permis�ive in th�[ chey appl}• only if �he municipaliry choosa+ ro
use them. The Minister of Finance may malce regulations to prexribe ho��� a municipaliry
malces this choia.
Only upper tier and single rier municipalities nn exercise this option.
, m
Classes oi Property
■■■ Biil 106 spaifies six cisses of properry: rcsidcntial and farm, muhi•unit residcncial,
.ommrrcial, inJustrial, pipcline, and f3rmlands �nd monaged Forcscs. Uill 1�49, iPpassed in
its curren[ form, �vuulJ maka seven duses by splitting the eliyblr farm and man�geJ furcx
class. The detinitions for �hac proprrry classes aill be outlined in rrgulation.'fhr \linisicr
of Financc hu the authority to prcscribe by rcguluion additior.al cluscs, r� drali rcgulation
�r,u rcicaud at the incroduccion ol Bill 149 For sccond rwding, �ehich �could escabtish an
optional clau (or nc��• mul�i•residancial propercies. Thc ne�v cluscs a ill not .orrespond
prccisch• aich the old daucs. For aampla, �he ne�v commar.ial propvn• class nill not
conwin esactly the s�me propertias that ��•cre in the old cammcrcial propcm• class.
Hu��e�•er, it is cxpec�cd that a luge portion of the propenies in the old classes uill be
carried orer inro the nae cluses. 5re �lppendis A for Jetails.
In any easation yrar, �he class [o �chich a properq• belongrd on Ocwber 31 0( the
preceding yeu ��ill be the clais uscJ for sssessmen[ puryoses. No�ccear, il therc are changcs
to the land afirr Uctober 31 but bcl'urc thc brginning of thc wwtion ywr �ehich resulc in
ehe property h��ing eo be placed in a di0erent clau, the changc �cill bc made by thc
.uxaor md the mwiicipalin� �cill altcr the .ollcctor's roll to rcmgnizc thc .6angc li�r thc
up.oming tasuiun yur.
A drati regulaeiun was « Icurd in Saptambcr 1497 at the introduniun of Bill 149 1'or
second rcading and the Follo��ing definitions for the di0crent propam� classes ��arc
proposed:
Resld�nllal/Fa►m
Residamial properp• consisn of land used for low densiry rcsiduuial purposrs, such as
singlrfamily houses or condominium uniu, Innd used for resiJential puryoses on a scason.�l
basis including campgrounds, land o�cncd br a to•opentice or a mryoration aiehout share
.apital, or a group home.
The ruidential clus also includes specific lands not used For resiJrnti�l puryoses, such as
larm IanJ chac das not fill in che timi land clus, land oa•ned by a non•pro6i organization
and used (or child care pmprnes, land o�rned and occupied b�• a religious org�nizacion no�
used tot commcrcial acti� ity, land owned by a consereation amhorit}t and land o�cned anJ
a.upied by � nomprofit ser�iu organization.
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. ■ • • Multt•r�sid�ntlal � �
This dacs consisu of land that is usad for residrntial puryoses that hu scren or more se16
con[aincd units. An additional class �ehich identifias nn�� multi•rcsidrn�ial buildings �rill be
aeailable.'I'hc nac clau ��ill enable municipalities to encourage the Je�elopment of ne�e
multi•residcnti�l hawing stak by imposing a loaer tax rate on these nea• buildings than
�her do on oldu multi•residential properties.
Commerotal
The commcrcial clus includcs all land �hat is not includcd in any oth�r pruperq� class,
including hotcls and motcls.'fhi� class alse includes properry• that dou not contain seren
or morc self•contained residrntial uni[s, �ehich is upented on a 1'orprotit basis and is uscd
far rcsidential puryoses where the residen�s rcccire usistance aith their eeeryday living
(c.g., residents are pro�idcd meals �nd penonal ure). This includes homes for the agcd,
homa for special caze, retirement hames �nd nuning homes oper�ting u comm�rcial
centures.
Industrl�l �
The industrial properry dsss consisn of land used far, or in connection ��ith, manufacmnng,
producing ar prausing, u aell ss lands used far rueuch and da�•elopmcnt and storoge
actiritics in conncctian xith mmufacturing, producing and praessing.'1'hc dus also
includu land uscd for gcncnting or tnroforming hydralcctriciry.
PlPelin•
This clus af properry coroiits of pipe:ines ss they ue praently defined in the Assessment
Acc. Buc rathar than including enmrory linear footage a�seument r�tes in the els:essment
Act, the hfinistcr of Finance «till prescribe n�w useumene rates by regulacion using the
wme bue �rou ��alue az all other propertics.
�armlands
The farmlond.s clus «ill be nxed at ." 5 per ccnt of the residential tu nta Subject ro ttrtain
rcsMctiom deniled in the regul�uon, I�nd uud for farming, including outbuildings, is
included in this class. lt is proposed that qu�lifintion for the new farmland clau be bucd
on the criteria for qu�lifica6on for the Farm Tax Rebate Prognm that applied in 1997. The
yualifiacion criteria uill be defined by «gulation.
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� ■ � ■ ■ Mana�ed Fo�uts �
Eligiblc managed forests ��ill be taued ac 25 per ccnt oF the residcntial wx ratt. 7'his dass
woulu consist of I�nd that is subiect ro a managed forcst agrcement. If the land is used
for othrr puryases, it uould be reclassihcd and the rax prcFarence would be climinamd.
Furthermore, it is intrnded ch�t chc taz brcak chac the properq� had anjo!•ed as an eligibic
managed forcst would be rccorered for the year in �vhich it ce.ued to be cligible and such
change an 6e made by the us�uor up to four yean later.
Classlflcation of Mixod•Use Propertlos
Under the Asseument Act, bafore the amendments made by Bill 106, multiple•use
proper[ies were �ucssed bucd on �heir predominant uia The Ontario Fair Assessmcnt
Systam will reyuire the uscssmcn[ commissioner ro di�ide thc asscsiment ot mised use
properq• among dit7uent cluses according to use. Thc municipality+�ill then apply thr
appropriatc t�x rate to the usesscd value of property in uch property clus ss specificd on
the usessment roll. This incrcaus f�irness by cnsunng, for example, tliat all retail storcs arc
razed at the same rate, rcgudlass of the nacure oP�he builJing in �chich they arc laarcd.
dubolass�• of Prop�rty
Bill 149, if p�ssed in iu turrcnt form, �rould acablish subclasses ol'property to �rhi.h ta�
rates ahich ae a(rxtiun of tha rcgular clus rate �eould apply. This uill cnsura tha[ thc
spe.i�l namre oFche properries is rcliccted in a fair w�y. At introduccion for second rcading,
the �1ini�ter of Finance releued propnsed am�ndmcnts to Oill 149 ahich «•ould define the
subcluses and estoblish �he nte rcduc[ion ur possible range oFratt raduc[ions �vhich a•ould
apply in the stame rather than reguluion.'fhe subcluses aould include:
a) Thrce subcluses for farm land a�e�iting derclopment for e�ch af tlu lollo��ing
classes: residenti�l/farm, multi residenti�l, commcrcial, ind�strial propern• classes.
The wx rcduction for the first subclass a•ould be in the rangc ol SOX to 75% and
the subd�ss would consist of properties �ti hich had rcceiced dr�k plan of
subdicision approeal.
The taz reduction for Ihe second subclas: nould be in the r�nge of 25% to 75?6
and the subclau �rould contist of properry which had receieed subdi�ision
regismtion,
The tax reduction for the third subclus �t�ouid be in the nngt of 0'% to 75% and
the subclass would consist of properry far which building parmits had been iuueJ.
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••■ b) A subclass cach for eacant land in che cammercial propc�n� class and eawm land in
�hc industrial propern� dass. The tax rate titt racant IanJ in thr commcrcial
propern• class ��•ould be reduced by 30%. For �he industrial prnperry class, the
rcJuction e•ould bc 3n%.
e) A subclus each for eacant units and escess land in chr cummercial proptrn• .Ires
anJ t•uau units and escess land in the industrial propem� class.'Phe tas rate ti�r
eawnt units and excus land in the cummercial propern• class �eould bc reJu.ed h}•
30%. Por vuant units and escess land in �hr industrial dass, the reduction aoulJ
bc 35%
The percenwge tax reduction �cithin a nngc uould bc specificd b�• municipal b�••
la�e If no perttntage is spe.ified, the taz rcduction �eould bt du highcs[
perccntage in �he range.
Bill 149, ifpused in ies currene form, �vould +Iso gice the \tinister of Finance thc authoriry
ro cstablish a subclus for eligible live commcrcial thcnrcs in dic ne�r Ciry of Torcmro to
bring their tates to a cumpetitive Icrcl.
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Tax Ratios, Ranges and Rates
••■ Currendy, municipalitiu le�y a buic mill ratt agynst commercial and industrial propern•
1'or rcalp� puryotrs. Thc mill rate for «sidential and firm usessnunc is sct at 85 per crnt
of the mill rate (or mmmercial and industrial asseument. This rigid relationship precrnts
municipali[ics (rom aJjus[ing tax burdens among di0erent d�sses ol'prupern•.
Under the neo• sysrcm, municipalities ��ill be abic ro set di0ercnt ntrs ol ��x on ea.h
property clus, subjcct to ranges of fairn�ss sc[ by the procincc.l'hese ranges aill ensurc
thu tazes arc not shifud onto properties that are alrcady subject to unlaidr high tax rams,
or off properties that ue subject to unfiidy lo�v wz rates.
Tax Ratlos
A tax ratiu defincs �he nx ratc of a.h propern• cl.us in rclation tu thc rcsidentiil/farm
class tax rua For ezample, iFthe .omm:rcial tax rate is 3.0 per snt, and thr rcsidcntial/•
farm ta: rate is 1.0 per « nt, the commcrcial tax ntio is 3.
Taa ruios ��ill be set mnually b}� upper tier and single ticr municipalities. The tax ra[ios sc[
by an upper tiar �rill goccrn oll the tax rnes wfihin each municipaliry in che upper tier.
Hou•eeeq �herc �re limits to municipal po�een ro se[ nx ntius — they must adhare ro
tnnsition ratios and nx ruio ranges of fiirness u dacribed belm�•.
T�ans�tlon R�tlos
The �linistcr of Finance xill prascnbe eithar transition ratios or a formula I'or wlculating
transition ra[ios. The �nnsition ruios are calculated like wx ratios, but they are based on
1997 t�xu and 1998 ususcd values. In effect, they raprcscnc the swtus quo at the time ol
reusessment and an be adopted u nz rarios to m•oid tax shifls among properry classcs.
The revenue nixd in 1997 from Husineu Occupanty Tax (ROT) uill ba included in thc
ta: ntios of the non•residential properry cluus in the calculuion af transition ratios. This
«ill allow municip�litiee, i(they choose, to recorer lo�t BOT from the cluses th�t
preti9ously p�id it. Municip�lities ��ill also be able ro reco��er lost BOT from other classcs, so
long as the recovcry adheres to the nx ratio nngu of faimess.
The transition r�rios uill �Isa take into account the propotal to reduce residential educuion
nxes by 50 per ttnt and make that [ax raom available to municipalitiae.
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I
� ■ • ■ .Tax Rat�o Rantu (Rangn af Fairnrit)
Taz ratio ranges �eill represent a f+ir range af wzatiun (or cuh proprtn• clus.'fhay �eill be
cst�biished in regula�ion by the hlinister of Financr.
. WIICfC d fWI151[IUI1 G1I10� Of [I1C PfCC10115 l'Cdf S IdX fJf10� IdIIS a7tI1111 tI1C fdI1�;C a1�fdlt11t55,
thc municip�lity may moce the tax raio �nl�ehrrc �cithin the range. \Vhare the transition
ratio, or the prcvious yca's tu ratio, (alls ouuiJe the r�nge, [he municip�liry mar krep thc
existing wz ratio or mme ic closrr to thc range. \tunicipalities may no[ mucr ias ratios
further a�vay from the range than tht uan:ition ratio, Of IIIG [dX fitl0 OP II1C PfCl1Ul15 \'CJ(,
�rhichecer is closer. This ��ill pra�•ent municipalities from shitiing wza cm to property
dasses thac arc tased unfaiAy high or ofl'property cl�sses that uc nxed untairl}• loa•.
Singlt tier and upper tier municipalities �rill be rcquired to pus � b��•I��v mi or bafore
htarch IF each ycu at�blishing tax ntins For �hu ycar. Ho�revcr, du Dlinisur ol \lunicipal
AOiirs �nd Housing c�n, by regulation, rstend this dudline begond 1larch I5. tiuch a
regul�tiun eztending the time cai lx made c�en �lier \farch I5. This is likely tu happcn
for 1998 because the 1998 usessment roll is schrduled to be rcmmed on April 3D, 199tl.
In aeo tier municip�litics, �he tu ntius csc�blished b�• the upper cicr municipalicy nill apply
to the Im�rr �iar municipalities as wcll.
For the fum land �nJ m�nageJ f'orests classes, � legiil�ted t�z ratio ol 0.2i �rill �pply (diu
is, the taz rair un eligible farm lond �nd eligible managed forests aill bc 25 per ant of tlic
rcsiden�ial wz rate). Qualificaeion (or �he nca� 6rm I�nd miJ managed ti�rests classes eill br
dcfined in regulacion.
'11it \linismr of Jtunicipal AlT�in and Huusing un sct a regulation reyuiring municipali�irs
thu pass t�s ratio byIms to pro�ide notice of thcir taz ratios to anyone named in the
rcgulation. Itan uppertier municip�liq� delegaus �ha auehority ro sct rar.os �o thr lu�eer
tiars, this rcgulation ��ill also appl�� to them,
tVhan municipalitia restructure, a na�• municip�l carporation tnurges and �he 1linistcr of
Finance may prescribe new tnnsition raeias for �he propercy cluscs in thc rcs�rucrored
municipaliry. lf it is �n upper tier or a single tier municipaliq•, the na�e municipaliq� can set
its mcn wx rotios according to the asual rules.
�
�� � ■■� �• Munlalpal Rasponslbilltles to Sat Tax Rate•
�ath ��caq bo�h upper and lo�ecrtiar municipalicirs adopc estimams chu :c� auc �heir
rcvenues and cspcndicures. Upper tien mast detcrmine ho�v much rrcrnua thcr can reix
uutsiric proprrn• ws. Oncr [his is datcrmincd, thr uppu•tiu cnuncil must pus, bc \tardi 31,
a bydaw sctting out properry cas raus.'Chc bydaa• sets uut [az ratcs to br Ic�ieJ for upper•
tirr purposes by each lo�eer•tier municipaliry on the usessment of ca.h propern• .lass. "I'hc
samr tax ratcs must appl�• in all lo��ertier municipalitics ��ithin an upprr tier.
For la�cer tier purposes, IOWGf [IGf CO110C1I5 SM]II �11f5 bY•Id\\1 IO It11' SCPdfdlt fdY fdICS Ilil
the asseament in each propern• clus.
The tas raus �ehich arc IecieJ by lxnh upper tius and lu�ear ticrs must conform tn the iax
r�tios fnr t6at taxuion ecar.
On a prutical Icecl, municipalicies could begin b)• laiking u the eflectire tas ratcs (1997
tases dirided be 1998 ususment) or tax burJen on e�ch property.lass.'1'hac may necd to
be f�croreJ up or do��•n if ehey do not generate appropriatc recenues.
Aluni.ipalitics �cill nccd to de:ide a he[her this is a f�ir allxation ��f taz, and �nc�thcr thc
wz ratios eonlorm ro prorinci�� rangu af faimess.
The f'olloeing tables show a sampk rcl�tianship beneean provincial nnges ol' laimess, and a
municip�liry's �nnsition r�tins and tax ruios.
Sam{i�o Provincfal Ta■ Rntfo flangos, of Fai�ness' �.
.�������
oaooaasa
000v000a
�.�
■ ■ ■
hbl� 2
1!!1 1l9t ERMM to��
�17Tua AuatMW4 Tu4hs 6+mdka
(f) (i) (1991aa199l) R�tlu
(%)
AetidmWl (6arJmri) N,000,000 1,200,OOO,WO 20000 L0000
Fym Isd 200�000 1D�OOOA� 2D000 L0000 •
Yau�ed Faat 66A00 1,100A� 20000 L0000 •
YdtFR�si�l N,1S0,000 300,000,000 I.fi00 LTRO
Caemadd 21SF+�000 ISO,OODA00 63500 31150
YodutM�l 2i.2S0�000 150A00�000 35000 L1S00
Pb� IWA7C 6�000�000 1.0000 L0�00
1S�tiAGO 5,719,100�000
• ,4/ua Ge �u rn 0.15
!ii rGit tnrc, r4t inuniripalinbar an�uiAaablr alrifiq rn rrallnratt rarn.
'fhc transition ratiu 1'or the.ammvcial clue, at 3. VSO, lalis abort the sampk rangc of
taimcss sho�rn in'1'ablr i.'flu municip�liry may sct a commercial tux ratiu no higher than
3.IT0. It may set a ruia an��rharc baneeen 3.IT0 anJ che minimum ratio of 2. II'i[ scts
a tas ratio lu�car than the traniition ratio of 3.1750 bur aboee the maximum prescribcd at 3,
say 3,1000, ic may never sct a taz ratio that e%cads this Ircrl.
' The transition ratio for ehc industri�l clus, at 1 J500, 611s belon• thc sample rangc ol
taimess shoa•n in Table l. The municipalitg m�y set an industrial tax raeiu no lo�ecr than
I J500. (t may set a ratio �n}uhere beneeen the maximum af 3 and 1.7;00, If it sen a taz
ratio higher than L7500 but bclow 2, say 1.9, it may nacer set a tac raeio lowcr �han 1.9.
The transition ruios f'or the multi•rcsidential and pipeline cl.uscs are aithin thc h}�pothetiwl
tax ratio ranges of Faimus. Thcrc(orc thair taz ratios may be sa ant�nc�re benveen 2 and 3.
tVhile the transieion ruios for the Farmland and managed forest cluses are mmpumd u 1,
bp Icgislation, che tax ruios must be set u 0.25. Adjustments ��ill have to be made ro ihe
wx ratios of the other clasus if the municipilicy intends ro nise the same amount of taxes.
�
. . .. . , . . ;..f . ..
•■' • aradualad A��essmsnt and Taz Rates
- for Commercial Propo�tlos
Bill 149 �vould allou� municipalities ro prouct thc uniquc charactcr of lo��•er ealued
commcrcial properties such u main street businesses and small ,�r.p malls. II passed in ii�
currtnt form, the Dill a•o�dd allow upper tier and singic tiu muni.ipal coun;ib to pass
by-la�rs creating t�co or thrce bands oFassessrd commercial �•alue, in order to appl�• lo�cer
tas r�tes to Imrarv�lued commercial proprrty. A dil7erent tas ratr �rould applr tu each
band. The \liniscer of Finance �voulJ hacc authonty, by «gulation, �o impose ratrictinns
on the mahod ofeswblishing rates if neassan•. Municipalities aill need ro build tlie
wpacin• of thair billing �ystcros to handic chcse pro�isions.
Rsbat�s to Charltablo •nd Simllar Non-profit
OrYanl:atlo�s
Uill 149, iFpuscd in its current li�rm, �eould rangnize du benclits di�t charitable anJ
similar non•prolit groups prociJe the communiry. The Bill �could permit municipalitics
�dth tac ratio setting authoriq• to gire tax reb�tes to eligiblc chantablr �nd other similar
organi:uions �xcupying commercial or indiuerial property. \lunicipalities aould be able to
rcb�rc up to i0% of the taxes pa}•abla This percanwge must be ihe ume f'or a0 nr�.mizanuus
named in thc bylau•.
At �he introduction for second rcading, the �Iinister of Finance propnsed amendmeius m
Bill 149 that ��ould define eliQjble charities 6y relerence to the federal Income Tax Act.
\funicipalicics could by� byla�v extend �his dafinition to inchiJe similar organizations.
Tax�tlon ot Linear Prop�rtl�•
Undar Bill 149, if pused in iu eurrenc form, raihv�y and Hydro righu of a�ay �eoulJ be
taxed on the buis of a tax rate per acre to increue fairness and tax stability. Rarcs (or h�•dro
and ruae for nilway would be established for nine gmgnphic ragions o( Ontario bi•
regulaion. The 1998 rates a�ould be esnblished so that taxcs for each taspayxr in 1998
�eould appro:imate 1997 n:s p�id in ach manicip�liqt The transition ro nine standud
geographic rates ��till be phucd in from 1999 to 2006. The ne�r rates will be indexed to
changes in commcrcial tax raees. A proposed amendment to Bill 199 anhounced by tlu
htinisttr of Finance at the introduction for second reading defined the geographic arws as
follo«•s:
�
_ ,
•■■ I. Thc Cin� of Toronto and che regional municipalit}� of Durham, Halton, Pcel
and 5brk.
2. The E4gional lfunicipaliry�ol'O« a�ea•Carlcton and thc umnties oP4mark,
Lceds and Grcnriilr, Crcscott and Rusxll� RCI11fC\\', and Srormunq Dundas and
� Glrngur}•, including the sepantcd municipalities simated in thosc muntics.
3. The councies of Fromm�ac, Haliburton, Hutings, Lannox and Addingmn,
Vorthumbadand, feterborough, Prince Eda�ard and Viccoria, induding �hc
separated municipalities siniated in those counci�s.
4. The regional municipalities of Hamilrom�Vanncorth, Ni�gua and R'aterloo.
5. The 14gional \funicipaliry• of Haldimand•?lorl'olk and thc.ountia ol'Brant,
Elgin, Essex, Kent, Iambton, Atiddlescs and Ox1i�rJ, including �he srp�ratcd
municipalites situ�ted in those counties.
6. The counties of 8rucr, Dull'erin, Grey, Huron, Puth, tiimccx �nd Wcllington,
including tha scpuucd manicip�litcs sim�ted in thase cumuics.
7. The Regional \lunicip�lity of Sudbury and the distric�s ofrUgoma, 1lanitoidin and
� Sudbury.
8. Thr Distnct �\lunicipaliry ui��luskoka and thc d�stricts ul'Ccxhranr, \ipissing,
Parry Sound md Tcmiskaming,
9. '1'he dis�ncu of Kenora, ftainy River, and Thwider Oay.
�
�
Interim� Financing
� � � ■ ■ � '1�998 Int�rlm FloancinY For Uppsr T��rs
Exccpt lor counties, an upper cier council can pus a bylaa• ta reise a pnrcion ol tha upper
tier le�y tiom wch of the local municipalitics brforc tht adoption ol upper tier utimnrs for
thc ycar. The bylaa• wn spccif}• the amounts and thr dates belixe �chich tax shoald be
funvarded to the upper tiec The sum reyuested by the upper ticr liom any of �he lo�eer
�iers must nat exceed fihy per ccnt of the amount rcquested tiom che lo�rv ticr
municipaliry in che pre�•ious qear's uppar ticr ra�ing bylaw. Undar Biil 139, if puscd in iis
current form, the Atinister of \tunicipal Afliirs and Housing:ould increase [his percrntagr
to takc into xcount ne�v responsibilicies to be nken on 6v �he upper cien under the "11'ho
Does What" initiatires �vhich are intended ro reduce oeedap and Juplication beuecrn die
proeincial and municipal lo�els of gocernment.
Countics do not ha•e spccihc authorin• ro impuse intrrim leeia nn thcir laal municipalincs.
Hnwc�•er, the authonn� ro raise the gencral county la}' in.ludca a pro�ision that sets oue
die inswlments (percenwge of the prior year's Ic�y or � percenwge of tha current rcar's
. �mnunt) In �chich the ganeral Ic�y is ro be paid and che dates on �chich lowrr �irrs must p��
instalmrnts. The fint and cccund inswlmeus must br p�id bcli�rc \lanh 31 and )unr 30
respcctirely and aill pro�ide the interim timds thu the caunn• nacds. Under Ilill 1�9, if
pused in its current form, the \linisrcr of Jlunicipil Atiain aiJ Flousing cuuld almr thc
amount. �o bc paid to eounties in 1998 in �ie«• of new "Who Docs �Vhac" rcxpunsibilieics.
lat�rim Finaneln� for 1998 for Looel Munioipalltles
Thc 1998 interim linancing requiremems for la�l mwiicipalities arc di0errnt tiom the
requircments for 1999 and subscqucnt }•cars, To r�ise the I998 interiiu Ie��•, local
municipilities can psss byda��s thu impuse spc.ial ws rates on JiOerent rateable propertics
in �he municip�liqt Ditlerent tax ntes can be imposed on dillerent proparn• dassrs and on
ditt'erent properties. These taz rates do not hare to be in the same proportion as the ta�
r�tios astablished f'or the municipaliq•. Ha�cccer, the interim tas burden mi any propern•
should not exceed the prcscribed percentaga (or 50 per ccnt if no perantage is pra.nbed)
of the 1997 taxu. For this puryosq the 1997 tax burden ��ill incoryorate any busincss
t�xes le�ied on occupants of �he propcm•.
Under "1Vho Does What", the eduntion tax on the residential properry class uill bc
rcd�ced and accordingly, the percentage o(the 1997 nxes pa�•able u 1998 interim le��� �o
school boards by loal municipalitias �vill be reduced.
. �
' .�
■■�■ Interim Flnancin� for 1888 snd Subs�qu�nt Year•
. For Local Munlalpslltlas � �
Brforc �he adoption of che estimatu I'or ihe ycar, council ol'a laal municip�litr C711 �1d55 J
b��-laa• co raise a portion of rcccnue rcquiremcnts b�� imposing a separatc taz r�rc �m thc
rateablc uxssmcnt in each proparty clus. Tlie amoun[ cxpcctcd to be raixJ liom any
property clus must not tsceed fifn• pv crnt of [he amount raiscd in the prccious }�rar t}nm
aU thc properties currendy in that cl.us. Furthermore, �hc Atinister of \funicipal AO'airs aod
Housing may prescribe, by rcgulation, the maximum amount that Iceal municipalicics can
requisi�ion on an inttrim basis.lVhere a limit is prescribed, the interim In�• th�t a municipalin�
imposcs on any property tlus can not exceed that limit. ,
If thc auessment rull for taxuion in du turcent �•eu has not bcrn rcturned at the time that
the laal municipaliry passcs a byI�w [o raise che inarim le�y for local puryosrs, thc tax
ruc shall be le�icd on thc most raenc osscssment roll. II'the assessmant .ommissioncr hu
provided a prcliminuy usasment roll for che purposcs of �he intcrim le���, tht prcliminarp
roi� can be used.
B��•laax (or nising intcrim loc�l municip�liq' leriu can be puud unl�• in [hc ewr in �� hich
the racs aill bc le�ied, or in December ot the pra�ious ycu if thc bydaw stipulaus �hat it
does not came into et7'cct until a specified day in the caming �•car.
' �
Delegation oi Tax Ratio Setting Responsibilit,y
•■• Upper tirr municipolicics atill ha�ro the authorin• tu sct nx ntios for both uppar ticr �nd
lo�ccr titt puryoses. Thus, 0 UI11i0If11 SC[ OI ti% (dt105 ��'III dPPI)' (O JII lI1C Io\Yff tlCf
municipalities and the upper ticr.
Ho�cr�•er, the Ontario Fyr (luessment S}stcm ��ill allo�v an upper �ier ro p�ss � b}••la�c
deleyuing its tic ratio•te[ting authoriry ro �he lo�cer tirrs. A no�r b?••la�v must bc psssed e�ery
�•tu that the upper ticr ��ishcs �o dalcgaa poaer ro thc In -•r ticn. Such a byla�� must
include the portion oPthc uppar tier le��• thu each of the lo�cer tien �cuuld h��c to raisc, or a
methal b}' ��'hich the le�y wn be apportioned among the loo•er ticn. Alunicipalities thu
choose ro ddegatc �uthoriq• «ill deeelop cheir o�cn apportionment nuthafolugy.
f�tunicipalitics thac arc mntempluing dclegation should also recognin thu unly upper ticr
and sin�le [ier municipalities can inscitute a phue•in program. Phurins �eill be req•
dilficul[ ro dcsign wherc the wx ratios are not unilorm �mong lu�cer ticr municipalities in
an upper tier.
Onm ehe daision �u dele�ee is made, all lo�cer tier municip�litirs in the upper tier �cill be
reyuircd �o srt their o�rn tax ntios, subjact to the s�me procisions ehat apply �chen thc
upper tier scts the ntios. The t�x raeios es�ablishcJ by the lo�cer ticrs �eould bc lix raising
rceenues tix both Imeer tier and apper tier purpases.
Nhile the upper tier pases ehe brdaw to dclegau t�x r�[io setting responsibilint all thc
lo�rer tien wnhin the upper ticr are required u� pass a rcsolution conseneing ro the
dcleguion (and �greeing on the apportionmcnt arrangements) belare it can wcur.'Chrse
arc the timclines Inr ddeguing authontq:
� tlu upper tier byda�v must be p�ssed by ►anuan• IS ol tl�e ycar in �rhich the
delagatian is intended
• �he cowuil of ercry loa'cr �icr municip�lin� has tu consent to the delegation
through a council resolution bcfore I+nuar}• I S of thc ycu
� upper tier municipalities cannoc amend or repeal b�••laas puscd ro dclegarc ihe ws
ratio•sating authoriry ro �he lo�cer �iers atier )anuary l5
• the lo�cv tier municipalitia ddegucd the aufiorin� ro sct t�x ratios lix a particulu
gear must pau byla�vs setting ihe ratio: on or beforc �f�rch I S of that �•e�r
� The Minisrcr of Municipal Aftain and Housing must designua (b}• spe.ific or
gcneral reguluion) che upper tier municipaliq� for [ht puryoses of deleg�tion.
before htarch l af the ywr in which an upper uer puses a b��•laa� to delc�te the
tax ruio setting rcsponsibiliry to its lau•er tiers.
��
` Phase�in of Tag Changes
••• Under the Ont�7o Fair �umanc ti�•sccm municipalities �cill hare up �o cighc �•ears, nei.e
thc pre�ious mazimum, to man�ge tax shi(ts in a lair �cay.
Dete�minatlon of 1998 A��essme�t-Rolated Tex
Inaroas�s or Dsarsas�s
Upper•tier anJ singlrtier municip.Jities can pus b��•la�rs tu phurin changcs m cduwtiun
and municipal taxcs ruuhing liom reusessment. Ho�eacr, laal municipalities arc rcyuircS
m par the full eduweion le�y to school boards, errn ahrn tax incrcues or drereases li�r
cducaeiun puryascs arc bring phued•in. The amomu th�t is «� be phased•in lor a proprrn
should be the dilkrcnce bearcen [ha 1998 aduwtion and municipal wses and the 199i
cduc�eion and municipal taxes on thc proprrn•, subjat tu �hc li�llo��ing restritcinns:
• For eligibla property, I9�J% [iCGS SI1Jt1IA Ifil'IUIIC b11S111CS5 W%CS III]l \PC�C �JIII 111
respect af tha properry, ccan if the propertr o�cner ��as nnt rcspansiblc li�r thru
taxcs.
•'fhe 1998 cducuian and municipal c�zas shuuld hc bascd on tax ratcs that
.onlorm to the transition ratios �pplinbir tu �hc pruprrty.lais, cccn i(thc
municipaliq• had esublisheJ ditterrnt wt ratios li�r the 1998 uzation rear.
• 7he 1998 assasmom should not rc�k.t improrrinents �o a pruprrry itehe
impro�ements �rere not uprored in thr 1997 asseicmcne unlass a supplcmcntal
sssasmcne nutice ��•rs issuaJ fur the property liv I'197.
� 1Yhcre the 1997 uscsvment re0ects impro�ements �u ihe properq� ��hidi arc noi
captured in the 1998 usessmcnt, �Of Illt �1UIF105Ct UI iJIC0IdI111� �IIC I�JyS UXfS�
the 1998 assessmrnt shnuW bt �djusted ro retk.t thc improcemems.
No D�I���tlon
Lo�rer tier municipaliries ��ill not ha•e the authorin� to pass b}• la�cs to ph�sr•in t�s
increues or decreues. tis �eell, the authoriry cannot be drlegatad b�• an upper tier ro the
lo�cer tiers. Nae•erer, a byI���• puud by an upper iier �eill appl�• to it: area mmiicipalitics.
�
� . � ■ • ■ � Othsr Requlrsm�nts �
\tunfcipalitia that .huose ro phase•in tax incrcues or drercues must begin in �hr 199N
tasation ycar,md phurin the increuc or dccrwse ovar � maximum perial ul'cight yean.
Municipalitics can phue•in tu incrcases and darcues at di0'erent ratcs bu� the rarcs should
bc unif'orm across thc entire upper tier or single �ier muni.ipalip•. It�tapayen ��ill pay full
taxc� in the nimh year. �tunicipalities may choosa to phurin a wx incrcase or Jeawse
over a shorar period of timc, but �hc amount to be phescd•in in any year mus� bc the samc
nr less than the amount phncd•in the preeious r•wr.
. � � . Tran�itlon ProvlNon
Ezisting phuain byda�rs rel�ting ro eaAirr rcusessments ��ill auromuically espirc nn
January I, 1498, whcn ehe ncw pro�isions in the Alunicipal Acc rcguding phurin come
into e(fect. If a muni�ipality �cislus to rewin its eadicr phuain b}••law �rhich �eu passad
under ehe old pro�isiom in the Atunicip�l Act, the muni.ipaliry must pus a byla�r belbre
the rnd of 1998 to mntinue its phsse•In bylaw.
�
Tax Relief for Low Income Seniors and
Loiv Income Persons with Disabilities
� ■ • ,il�IlO11�;I1 SC\Yfdl 111IIOICIPilltll'S I1]\'C �1f71'dtC It�;iSld�lUO �Ildt dIION'S IIIIIIICII 1I[Il'�fdl uf t.l\CS
�llf l'Cf(JIt1 CII�,IbIG CitC�,OfICS (1(h0I11CON'I1Cf5� tI1CfC IS (4ffl`I11I1' 11U (;CI1C�.II IC�;ISId1IlC �1�1NC(
to drtcr tascs. Undrr thr nea• pro�isinns, singln tier and upper tier muni.ipalitics nill hc
reyuircJ to pus a br•la+�• ro dcl'rr, CiOCtI Uf �1fU\7llf OIIICf fCllti�\YIIII 1CSF�CGt fU dII 11f ��dit
of the incrcases in municipal and education tases rcsuhing liom changes to thc assrssnuut
on proparn• in the residrntial/farm property class o�rncd by lo�e incomc seniun or lo�c
inmme prrsons nith Jiubilitias or thcir spouses. Jtunicip�litirs �cill haer the Flrsibiliic iu
dctemiinc the amoimt nf relief and the npe of reliel lag. Jelcrral or.anallation�, �s ac�l
.0 ahat nte of intcrcst (up [o market) ro ch�rga on Jrlerrale. They will aho hare thc
Ilexibilit}• to dctine �chat constitmcs lo��• income, senior, and disabled, li�r the purpoxs ui
the program.
In Jeveloping ehcse dclinitions, it ��ill be hdpliJ fi�r municipalities to.�insider exisnng
dcfinitions �hat hare been Jeroloped b�• those mimicipalities ��ith prirate Icgislatimi to
grant deterrals. For cxample, the Ciry• o(Kingston Pri��ate Rill (1993) uscs eligibilin• m
receice brnetin undcr tho Family Benefits Act, the Grncr�l R'dfarc �sisunce Act and die
Old Age tiecurity An (Can�da) to drfine �cho is eliFihle ti�r a t�% dctcrraL Oiher drliniuum
could also be uxd.
A���s�men!•R�latod Ta�c Ina►�as�•
Assssment•relaud t�x incrcaxs are those incrcaus (or cducatiun and municipal puryosrs
aneing dirccdr Gom �he implemrntation of �he new aiscssmrnt bue. lVhcrc �he
municipaliq• ha: upuJ eu phase•in tax increues, the maximum amuunt ol taxcs ihat can be
dekrrcd is the amount that is txing phascd•in during that taxation year.
Assessment•rclated tax incrcases beginning in �nv }•ear afier �he 1998 �axation yrar li�r
a hich relicl can be gicen ��ill be ta: incre�tts rcsulting liom a change in die raluation d�y
of properry for assessmant purposes from one �azation pear to tht next. Such assessmcnt•
relued tax incre�ses aill be datermined by regulocians to be made by the \tinister of
\tunitipal All'airs �nd Housing.
�
■ ■ e No Dsl��atlon - ..
7he upper tier ranno[ delegatc che auchoriry ro deFcr wses �o lo�ccr tier municipilitics, but
an upper tier byla�e pro�iding for a drternl �cill also apply to its lu�cer �icr municipalitics
and sch�x�l bauds u hich ��ill be rcsponsibk for some of thc amuunts drRrrcd. Limiting
chc ability to Jel'er wxcs to onlq upper tier and single ticr municip�litics �rill mak¢ it
possible ro maintain uniform dct�rral praccices across the ditterent Imcer �ier municipalities
in an uppu ticr.
Cher`e Boaks
1Vhile upprr titr and single tier municipalities h��e the amhoriq• ro pass byla�cs to proridc
nlicf linm assrssment related tax incrcaxs, lo�ccr ticr municipalitics may liare thc wsk of
collccting �he tascs. Tucs colkcted by thc lo�ru tier for xhiwl b�urd and upper tier
Purposes ��ill be rcdu.ed by ehe amount of the relieL 1�'hcn the dclerrcd taxcs and intcrctit
are p�id buk m �he luwer �icr, the Imcer tier is required to p�y du school board and the
upprr tier its sharc oPthe �mount.
Intsre�t to b• CM1ar��d on O�f�rral of Taxs•
A mwiicipality that p+sses a byda�r to defer wxes may �Iw speci'ty an interest rate to be
.harged on JcfirrcJ tarrs. Tha municipaliq• is frce tu .hcwsr any ratc up to thc market
ratc.
�
The Simplified Assessment Appeals Process
•�� T7ic Ontirio Fair Asseument ti�stem ullcrs a simplificd disputc sctdemcnt pracss ti�r
taspaqrrs e•ho aish to appeal their property assessment or dassification. Formcrly, dccisium
af thc �lvsessment Re�in�• Board (r1RIS) ahich Jwlt ���ith dispwas rcl�iin�; to assessmcnts
cuuld be appealed tu the O\18. Under the nrw pro�rsions, Illt 111\'oIeC1IlCllt 11� tI1C O�IIS
t�ill bc eliminated for all cases in ahich ARB hcarings hacc not bcen iumpicrcd by �anuary
1, IBB}S, TI1C AI�B 117II bt fCSt�UCtUftd IO ifl'][C J SItlFIC IICf dSfl'SSlill'llt J(��1CdI1 S1'StCill.
Ratep�rers �rho ��ish �o appwl [hcir assessmane nacd not go dircctl�• to the �Rli. First, .i
ratcpaycr can mquest th�t the assessment bc rcconsiJered by the Assrssmcnt Commissioner.
If an agrccmen[ is not rcached, the taxpa�•er can thcn lodgr a.omplaint in �eriting �ciih thc
ARB, at �rhich tima a fee p�yable by the ratepacer �rill be rcquired.
If an agreement is rcached beneecn thc nxpacer and the rlsxssmcnt Commiuioncr, thc
Commissionar �eill gire notia of the se�demant to dic ARD, whi.h will dun ensurc that
the municipaliry• in ahich thc property is sim�tcd is notificd and gi�rn a perioJ ol timc in
�vhich to obje:t.
1°the municipaliry does not object, the Altli �cill change the usessmant ro rellect th.
satdemrnt. f(thr municipaliq� objccts, the municipalih• ��ill then hace to appral in ��riiing
eo the AR9. When an appul i: k�dgcd �cith the AKIi, the parry� (including municipalitics
and xhw�l boards) lodging the appal will ha�e to pay a 1'ee.
Currentl��,.uxssment appals h��•e to ba launched ��ithin 21 da��s al'rcr the rcmrn of [he
assessmcnt rall. l:ndu the new pro�ieions, ihe last day for appealing an assessment for a
taxation year aill be �he 3lst day o( hlarch (ollo�eing the remrn of �hc assessmant roll 1'or
thc taxarion yeae 1Vharc the Minister of Finance extends the time (or «mrning the
usessmcn[ roll, the Isst day for an appwl �cill be 90 Ja�s follo��ing the rcmm of the roll.
Ho�verer, in 1998, the roll uill be returned on April 30 and the last dal� �o appeal is
Jun� 29.
On quastions of lau�, any parry to a hearing beforc the �iRD can, «ith leare, apply to the
Di�isional Court'fhe ARB un also snte a cuc to the Dirisional Court (or its upinion on a
question of la�v.
�Vhue there is a dispute about eligibiliey for inclusion in tho fumlands propern� clus or thc
managad forut class, the praedure for a re•consideration and appcal uill be prescribed b}•
the Ministcr of Financa
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Other Issues
� ■ • ■ Int�rnatlonal Brldses
Bill 149, ifpused in In.urrent form, ��•ould bring fair and consisttnc �rca�ment ro
usessmen[ of intrrnatianal crossings. rVl inumation�l ttossings �could be tased in a
manner similu ro the prucnt Inumational Bridges �lunicipal Payments Act. The bridgc
or cunnel strucwre �rould not be usessed but ���ould be subject to a special payment
prescribed by the \finister of 1lunicipal rltiain and Housing. land and buildings uscd fur
bridge puryoses �could be taxed for muniripal but no[ rdua�ion puryoscs. N'herc a
privuely m�ned bridge pays morc properry• tases in the USA than [he sum u( thr prescribcd
p�yment and che taxes on land and buildings paid �o �hr Canadian municipalin•, �he bridgc
o�ener �could be « quired [o pay an additional amount to the Can�dian municipaliry•, tu
bring equalin� co the amounts.
. Qros• R�a�ipls T�x
i1s announced in I+nuu�• u part of thc �VbIV iniciui�es, the re��enues liom this tas ��•ill no
longer go to mimicipalities. Undar Bill 149, if paescJ in its currcnt lorm, the recenues
��ould go �o the pro�ince. This meawrc eouW make it wsier anJ less costl�� Ibr d�e
telecommunications industry �o compl}• �� ich ws law.
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Chronology of Critical Decisions
� ■ ■ ■ Crltical Munleipal Doel�lons
`� �Vhere the authority ro sct wx ratios is to bt delegatcd br tl�e upper ticr «� its
� eonstitucnt lon•or tiar municipalities, �hc muncil of �hc upper ticr m�micipalii}�
mus[ pass a b�� law be(ure I�nuan• IS oFthc year in ahich authuncr is deleg�icd.
• For thr upprr tier brda�r ro bemme c0e.tice, cach lo�ccr tier munitipalitr nui�i
psss a rcsolution b�• lanuan• I5, consenting to tht delegatiun.
• tiingle tier and upprr �iu municip�litirs arc rspattd ro psss b�••la�rs w euabli�h
�heir tax ratios for that taxation vwr bv Much IS.
• 1ti9un the wx ratio•setting awhorin• hu bcen dcicgaccJ [o thc lo�ccr tier
municipalities, they arc requiraJ to mcee tha same dcaJlinr in cstablishing the
taz ratios as upper tiars and singlc iirr municipalities, diat is, thrir brda�es must
be paued b}• At�rch I5.
On August 6, 1997, the prorinm rcleucd prcliminuy assessment data to upper iicr
municipalities. StalTof tha Properry• Asseumenc Di�ision of thc \tinie�n• ol'Finance ha�c
schedulcd �eorkshops and re�ulu mcetings aith municipal olticials to discuss Jata Jcliren•.
II'municipal statihave not h�d �he oppormnin• to utend such a a•orkshop,
pleae connct the Rogional rlsscssment OOia.
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� . ; �r�� � . .
Glossary�of Terms
••• Aiuued V�lue (A�anmmt� Thr value ofa pruparq� (lands and buildings) li�r caxaciun
puryosas.
Aeaum�nt B�s� The aggregate of all land, .0 dclinrd in the rbsessment �1ct, assessed li�r
thc purposes af tasation.
Assessmenl Commluloner 7'hc pcnon Icg�lly rcsponsible for all proprrt�• asscssmcnts in an
.ustssment rcgion.
Atwttm�nt �cb Tlu yearly �ti•de of,usessman[•rclated uti��iry� ��hich leads w the delirerr
of the asscssment roll to a Icxal municipality.
Atattm�nt R�qon An uea uf thc procinm under thc jurisdittion ol an Assrssmrnt
Commissionec There are 31 rcgions, thc bounJaries ol �chidi .oinciJc �eith thuse ol the
countias, «giunal municipalnies ur Jistricts in their area.
Muum�nl R�rl�w BaM IARB) An indaprndent uibunal ahich hr�n asxssment appcals.
rl� of )anuary I, 1998, the :1R11 aill be the single Icrcl ol appcal li�r aucs5mrnt mattcrs. A
decision made by the ARD is tinal unlcss a p��int ol la�v is being Jisputad.
Asuum�nl Roll �1n �nnu�l list o(the asscssed ralues ul ail propertics in a municipality,
���hich includes the name uf dm propern• o��nar or tenant, thcir adJress, thr rcalty ta� .lass,
scnias to and size of �he propern• and inlormatiun un strucmrcs nn thc prnperq• if anp.
Asscssmant rolls are usually dcli�creJ to a municip�litp u d�a enJ o(ihr �•ear praeJing thc
nx�tion �•ue In 1998 onl}•, the mll �eill be delirercd on Apnl 30.
B�w Yur The year used ti�r est�blishing du assessed ealue (or all properties in a
muni.ipalin•. For esample, the base year for the 1998, 1999 and 20U0 taution yran aill bc
)wu 30, 1996. Tlu base reu ti�r the 2001 and 2002 tas+tiun �e�rs nill be �une 30, 1999.
Butlneft Oteupmey T�z Tax imposcd on � businas ocer and abo��c �hc rcalry wc p�id b�•
the owner of tha propern�. "I'hc BOT is paid by �he operator ol the business. Thc DOT ha�
bcen eliminated.
CI�t�111c�Uon Deurmina[ion of �he class or subclsss in a hich land is placed I'or tacaeiun
yurposes.
Clasdflc�Uan D�t� If land bclonged eo a particular clus on d�is da��, that �rill be thc .I�ss in
�ehich d�e proptrq• uill bclong for taxuion puryoses in the coming tazation ywr. This da�•
is October 31.
Con Cl��uf Set of secen classcs a hich all municipalitias �eill be required to hare.
Municipalities �vill not neassaril}� haee ro have assessmrnt in ach one of the �lasses.
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••� Curnnt Up Use to ��•hich land is b�ing put at tht time ol assrssment.
Cumnt Valus Refers to the amount of money a properry �could rwlize if soW at ami's
length by� a��illing srller ro a uriling bw•ec All propertirs in Ontario ue being reasseueJ
b.ueJ on thrir currrnt ralut.
&tlm�t�� Taliy of a municipaliq�'s rcvenucs and expenJiturcs to Jemrmine the to�al
amounc of money required by the municipalip� for in opantions f'or thc crar.
L�nd As detined in the Assessment Act, land inc!udes buildings, trees, miner�ls and land
carcred ��ith �eatcr.
Lowv tl�r Municip�llry A municipalin• ahich is part ol'a counn•, region ur district
mimicipalin•.
Onlado hir Autssment Sritem IOFA51 The ne��� asscssment s�stem crcatcd unda the Fair
�fonicipal Finance rlct to makc property auasment and che cakulation uf properq• taxcs
fiir, consisant and undrntandable uross the pro�ince.
Propety Clau A grouping of the same t�pe ul properry for asscssment and taxuion
purpos�s.
R�It�bl� Mwtsm�nt :lsseued value of properry• that is not excmpt from �axation.
Ratebl� Yropufr Real propeny thu is subject to municipal taxation.
R�tln� Byla� Upper ciar bylaw directing wuncils of lo��er tier municipalitics to Iny
specific taz nus on the nteabk aisesemont ol'the diO4rcnt proparry• clasus.
Rel Propefr land and buildings. Ofun called "properry" or, under �he Assessment Act,
rc&rre� ro ss "land".
R��tt�ttm�ut The praess of creating a n���• bue far propern� taxation by updating
assessmenu to rellect more recent �•alues.
Sln{I� U�r Munlelpality A municipality that is not part of a counq•, rcgion or district
Subelan of Prop�rly A subsection of a class of properq� prescnbed by the Atinister of
Finance for the purposu of applying a lower tier nte.
Supplem�nt�ry A�wum�M M usessment made during a[axation year for an addition,
ranm•ation or new consvucdon, ar the changt in sntus of � properry �rhich cwses to be,
or becomu, exempt from tazauon. ,
Suppbmmtary ClaulflaUon Placing land in dif%rent classes �vhen changcs arc m�de to the
land after Ocrober 3! but bcforc the beginning of the coming taxation ��ear.
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••• Lt Burd�n `lmount of propertytu paid in resprct of a propury or properq� cla3s.
Ax R�t� A percentage applied to the zssessed calur ol � propert}• ro genrrate tax p�yable.
\luni.ip�litiu ��ill xt �he tax rate for each proprrq� clus bucd on thc revenue thry �rill
nerJ m supply laal stniccs.
T�z R�tlo Dehnes the tax rate of ach property clau in rduion tv thc r�rc ol thr
rcsidential/6rm properp� clus. The cax ratio for rcsidanti�l/fum prcpern•.lass uill bc I. 1(
�he tu rue fur commcrcial properry is n�im th�t of residenti�l propern•, dxn thc
commrrcial ax ratio is 2.
Tix Rallo Ran{n Ranges of fairness to be set b�� the pro�ince f'or muni:ipal tas r�tius.
Lx�tion Yur )�nuuy I sc to Decembcr 31.
TnndUon R�Qat Tlx �az racios �hac cxis[ in uch municipalin� �s of )anuary• I, 199R.
Transicion r�tios « Ilect the relati��e t�z burdrn ofuch clus just beforc rcli�rm of chc
usasment anJ uza�ion s�ntem.
Y�IwGon D�b St�tu« �ry days on ahich the :urrent e�lue of land is determined. The
.urrent calue ��rll thcn be uscJ to determine die assesxd r�lue of the land.
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Appendix A
•Clan 7 iudwdrA ro�naqrA/'am�
Not�: The establishmcnt of ihe scve� nc�v properq• clascs is nat a dirc.t cansolid�tion
Gom the esieting eight Qwas bccause asscssments nill be distnbuud benccen thc nau•
property cl.uscs (e.g., in the caa of bona fide farms, farm Iand and farm resiJcn.cs all
belong in the fum clus under the old sgstem. UnJer the new system, �ha�• «ill be dicided
benveen the residentiil/f�rm clsss md the firmlands cl�ss). Baause wch properq� clus «ill
hace iu own unique tax nm, the properry clus in ahich a property gets slotted becomes
more significant. For many propertics, the appropriate properq• clas u�ill be ob�ious, but
there ��ill be circum�tmces �ehere policy decisians «ill bc made ro plue thcm in a
particular properry dsss.
It should also be noted �hu some tuable usessment uill bc rcmoeed Gom the taxabic
usessmrnt bue (e.g., railwsy md hydro rights•of•way uill be taxcd in a dif�erent manner,
and consen�tion lande «ill be uempt).
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