HomeMy WebLinkAboutFIN 13-19cry,/
DICKERING
Report to
Executive Committee
Report Number: FIN 13-19
Date: June 17, 2019
From: Stan Karwowski
Director, Finance & Treasurer
Subject: 2019 Final Tax Due Date for Commercial, Industrial, and Multi -Residential
Realty Tax Classes
Recommendation:
1. That Report FIN 13-19 of the Director, Finance & Treasurer be received;
2. That the Director, Finance & Treasurer be authorized to issue the final 2019 Tax
Bills for Commercial, Industrial and Multi -Residential properties with a due date of
September 26, 2019;
3. That the Director, Finance & Treasurer be authorized to make any changes or
undertake any actions necessary, including altering the due date, in order to
ensure that the tax billing process is completed and in order to comply with
Provincial Regulations;
4. That the draft By-law attached to this report be enacted; and
5. That the appropriate City of Pickering officials be authorized to take the necessary
actions as indicated in this report.
Executive Summary: Adoption of the above recommendations and passing the
attached By-law provides for the final 2019 tax billing for non-residential tax classes
(commercial, industrial and multi -residential). During the last few years, the City has
billed the final non-residential taxes separately, mainly due to the additional steps that
are required as a result of the capping legislation.
Financial Implications: The attached By-law is for the final billing of 2019 property
taxes for commercial, industrial, and multi -residential properties. This billing of final
non-residential property taxes will raise approximately $33.5 million for the City, Region
of Durham, and the School Boards. Tax bills for the residential tax classes were mailed
during the last week of May, with due dates of June 26th and September 26tH
FIN 13-19 June 17, 2019
Subject: 2019 Final Tax Due Date for Commercial, Industrial and Page 2
Multi -Residential Realty Tax Classes
Discussion: In 1998, the Province introduced Current Value Assessment or CVA
on a Province -wide basis to replace the old patchwork system (throughout the Province)
where each municipality used a different base year for assessment purposes. The end
result of CVA was that some businesses experienced property tax increases well above
100 per cent. To reduce the property tax increases, the Province introduced capping
legislation in 1998.
The City of Pickering will soon be in a position to issue the final 2019 property tax bills in
accordance with the capping provisions of Bill 140, Continued Protection for Property
Taxpayers Act, 2000 and implemented through various regulations (Bill 140 replaced
the original capping legislation of Bill 79 introduced and approved in 1998). This
legislation was put in place to limit assessment reform related increases to 5 per cent
per year on commercial, industrial and multi -residential properties. Under this
legislation, property owners facing increases due to property assessment reform had
their increases "capped" (reduced). Conversely, those properties experiencing
decreases were limited to that permitted under the legislation. This meant that taxes
had to be clawed back from those experiencing decreases to fund the loss of revenue
resulting from the capped increases.
The funding of the capping protection is paid for on a Region -wide basis. The Region of
Durham acts like a banker in this process. For example, the total cost of the capping
protection for commercial tax class is paid for by the other commercial properties
throughout the Region by having a portion of their property tax decrease withheld
(clawed back). As part of the Region -wide process, the City of Pickering uses a
Provincial database program called "Online Property Tax Analysis" (OPTA) to verify
non-residential assessment data. Every municipality within Durham Region uses the
OPTA system. Assessment Review Board decisions and Minutes of Settlement
decisions have been incorporated into the capping calculations up to the "cut-off date"
of Apr 1,2019.
Bill 83 — Legislative Changes to Capping Legislation
In 2004, the Province passed Bill 83, Budget Measures Act, 2004, which provided for
various optional tax tools that could be used for the non-residential tax class. In a two
tier municipal government structure, the upper tier has the option to select all or some of
the tax tools. These tax tools consist of the following options:
1. Annual threshold increase of previous year's annualized taxes raised from 5 per cent
to 10 per cent.
2. Annual threshold increase capped at 5 per cent of previous year's CVA taxes.
3. Billing threshold established whereby a property that is within the $250 of its CVA
based taxation is required to pay its full CVA property taxes.
4. The minimum CVA tax for new construction properties was 60 per cent in 2006. New
construction properties are now fully phased -in at 100 per cent CVA tax.
FIN 13-19 June 17, 2019
Subject: 2019 Final Tax Due Date for Commercial, Industrial and Page 3
Multi -Residential Realty Tax Classes
The purpose of these tax tools was to accelerate the movement of non-residential
taxpayers to full CVA taxes (such that taxes are calculated using Current Value
Assessment multiplied by the corresponding tax rate).
Bill 144 — Legislative Enhancements to Capping Legislation
In 2015, the Province provided additional enhancements to the capping program
through Bill 144, the Budget Measures Act, 2015. Beginning in 2016, municipalities are
able to increase the annual cap from its current level of 5 per cent of previous year's
CVA level taxes up to a new maximum of 10 per cent. In addition, municipalities are
able to move properties directly to CVA level taxes if they are within $500 of CVA level
taxes, up from the current $250 threshold. The annual cap of up to 10 per cent of
previous year's annualized taxes would be maintained.
For 2019, the Region of Durham has adopted all of the tax tools and enhancements
referenced above, which will reduce the potential remaining life of this program and the
protection requirements.
Under the Municipal Act, Subsection 343(1), the tax bills must be mailed 21 days before
the due date. Taxation staff are cognizant of this legislative requirement and design the
tax billing process to meet this requirement. The coordinated efforts between OPTA
and Durham Region municipalities have accelerated the capping calculation process
over the last few years, allowing the capping 'freeze' to be completed earlier in the year.
Table One
2019 Billing Due Dates
As the above table indicates, the residential taxpayer has four instalment dates and the
non-residential taxpayer has three dates. In the past, the City has provided indirect cash
flow assistance to the non-residential taxpayer by providing them the advantage of
skipping the June instalment date, and by having the final instalment due in the fall. This
year, taxation staff are recommending that Council continue with the June payment
holiday for non-residential properties.
Communication Strategy
In addition to mailing the tax bills, the City will advertise the tax instalment due dates on
the City's webpage and in the Pickering News Advertiser prior to each tax due date.
February 26
April 26
June 26
September 26
Instalment
Dates
Residential
X
X
X
X
4
Non-residential
X
X
X
3
As the above table indicates, the residential taxpayer has four instalment dates and the
non-residential taxpayer has three dates. In the past, the City has provided indirect cash
flow assistance to the non-residential taxpayer by providing them the advantage of
skipping the June instalment date, and by having the final instalment due in the fall. This
year, taxation staff are recommending that Council continue with the June payment
holiday for non-residential properties.
Communication Strategy
In addition to mailing the tax bills, the City will advertise the tax instalment due dates on
the City's webpage and in the Pickering News Advertiser prior to each tax due date.
FIN 13-19
June 17, 2019
Subject: 2019 Final Tax Due Date for Commercial, Industrial and Page 4
Multi -Residential Realty Tax Classes
Attachments:
1. By-law to Establish the 2019 Final Property Taxes and Due Date for the
Commercial, Industrial and Multi -Residential Tax Classes
Prepared By:
Mi.. - Jones
Supervisor, Taxation
Approved / Endorsed By:
Stan Karwowski
Director, Finance & Treasurer
Recommended for the consideration
of Pickering Ci Council
Tony Prevedel, P.Eng.
Chief Administrative Officer
ATTACHMENT #,-j _TO REPORT #±Lt -r41
The Corporation of the City of Pickering
By-law No. XXXX/19
Being a By-law to Establish the 2019 Final Property
Tax Due Date for the Commercial, Industrial and
Multi -Residential Tax Classes
Whereas it is necessary for the Council of The Corporation of the City of Pickering,
pursuant to the Municipal Act, 2001, S.O. 2001, c.25 as amended, to pass a By-law to
levy a separate tax rate on the assessment in each property class; and,
Whereas the property classes have been prescribed by the Minister of Finance under
the Assessment Act, R.S.O. 1990, ch.A.31 as amended, and its Regulations; and,
Whereas it is necessary for the Council of The Corporation of the City of Pickering,
pursuant to the Municipal Act, 2001, S.O. 2001, c.25 as amended, to levy on the whole
rateable property according to the last revised assessment roll for The Corporation of
the City of Pickering; and,
Whereas the Regional Municipality of Durham has passed By-law No. 22-2019 to
establish tax ratios, and By=law No. 24-2019 to adopt estimates of all sums required by
The Regional Municipality of Durham for the purposes of the Durham Region Transit
Commission, and By-law No. 25-2019 to set and levy rates of taxation for Regional
Solid Waste Management, and By-law No. 23-2019 to set and levy rates of taxation for
Regional General Purposes and set tax rates on Area Municipalities; and,
Whereas an interim levy was made by the Council of The Corporation of the City of
Pickering (pursuant to By-law No. 7668/19) before the adoption of the estimates for the
current year; and,
Whereas sub section 342 (2) of the Municipal Act, 2001, S.O. 2001, c.25 as amended,
permits the issuance of separate tax bills for separate classes of real property for year
2019.
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
1. For the year 2019, The Corporation of the City of Pickering (the "City") shall levy
upon all Property Classes (Residential, Commercial, Industrial and Multi -
residential) as set out in Schedule "A" of By-law 7690/19, the rates of taxation, for
the City of Pickering, the Region of Durham and for Education purposes on the
current value assessment.
2. Where applicable, taxes shall be adjusted in accordance with the Continued
Protection for Property Taxpayers Act, 2000, as amended and its Regulations.
3. The levy shall be reduced by the amount of the interim levy for 2019.
By-law No. Page 2
4. The 2019 final tax capping calculations for the industrial, commercial and multi -
residential realty tax classes are based on a freeze date of April 1, 2019.
5. The 2019 taxes owed for the commercial, industrial and multi -residential
assessed properties shall be due in one instalment on September 26, 2019, or as
adjusted by the Treasurer.
6. Except in the case of taxes payable under Section 33 and 34 of the Assessment
Act, R.S.O. 1990, c.A31, as amended, the percentage charge as a penalty for
non-payment of taxes and monies payable as taxes shall be added to every tax
or assessment, rent or rate of any instalment or part thereof remaining unpaid on
the first day of default and on the first day of each calendar month thereafter in
which such default continues pursuant to subsections 345 (1), (2) and (3) of the
Municipal Act 2001, S.O. c.25 as amended. The Treasurer shall collect by
distress or otherwise under the provisions of the applicable statutes all such
taxes, assessments, rents, rates or instalments or parts thereof as shall not have
been paid on or before the several dates named as aforesaid, together with the
said percentage charges as they are incurred pursuant to sections 349, 350 and
351 of the Municipal Act 2001, S.O. c.25 as amended.
7. If any section or portion of this By-law is found by a court of competent
jurisdiction to be invalid, it is the intent of Council for The Corporation of the City
of Pickering that all remaining sections and portions of this By-law continue in
force and effect.
8. Taxes shall be payable to the Treasurer, City of Pickering.
9. This By-law is to come into effect on the date of its final passing.
By-law passed this 24th day of June, 2019.
David Ryan, Mayor
Susan Cassel, City Clerk