From
the Ontario Chamber of Commerce (March 1, 2006)
Critical Issues in
Ontario Property Tax– 2006
Recently
the Municipal Property Assessment Corporation (MPAC) conducted an
Assessment update for the Province of Ontario effective for January 1,
2006 taxation.
All properties in Ontario are valued using a January 1, 2005
market base. Property owners in Ontario will by now have received a
Notice of Assessment indicating what the assessed value of their
property will be for 2006 taxation.
The
following are some key issues relevant to property assessments during
the 2006 taxation year:
Business
Enterprise Value (BEV) is commonly described as recognition of the fact
that a successful business operation in its entirety has value above
that of real and personal property. The BEV issue affects income
generating properties such as golf courses, office buildings, hotels and
shopping centres. Separating and measuring this intangible value
from the tangible and assessable real property has long presented a
challenge to appraisers and assessors alike. This is particularly
true of property types where the income approach to value is prevalent
and the income from the entire operation, not just those related to the
real estate are considered in the valuation. MPAC has accepted and
identified to a certain extent that this is an issue, but there is by no
means an agreement as to the amount and how to best measure the BEV.
This issue is far from settled and will continue to be debated and
litigated for years to come.
Environmental
issues are another concern that impact property value and thus property
tax assessments. Contamination can exist in the land or building of a
property and can certainly affect the potential selling price of a
property. Currently, MPAC has not set a clear direction with
respect to how this impacts valuation.
In
addition to questioning the land value, relief can be sought under the
provincial government Brownfield program. This program was
initiated to promote and encourage the clean up and development of
Brownfield land. The program allows municipalities to offer owners
up to a full tax rebate of the annual municipal taxes. However,
the funds the province has dedicated to this program are limited and
subject to approval by the Ministry of Finance.
Tax
payers may find municipal tax bills continue to be as complicated as
ever as municipalities apply various tax mitigation options available to
them. Previously municipalities were permitted to increase the
annual property taxes on properties in eligible classes by 5%.
Changes in the legislation now allow municipalities at their discretion
to increase taxes from 5% to 10% annually. This change could
result in larger increases in property taxes for properties that are
currently protected by capping legislation.
Several
avenues are available to owners and tenants to reduce the tax burden on
the property they occupy or own.
Property
owners and tenants can file an assessment appeal with the Assessment
Review Board (ARB). The ARB is an independent tribunal that will
consider evidence from both MPAC and the owner/tenant before making a
decision on the value. The deadline for filing an assessment
appeal is March 31, 2006.
The
Request for Reconsideration process is also available to the
owner/tenant of a property. The application is filed directly with
MPAC. The owner/tenant can complete a form providing evidence to
support a valuation reduction. There is no cost involved with this
process, but there is also no recourse if MPAC feels the value is
correct. The deadline for filing a request for reconsideration for
the 2006 taxation year is December 31, 2006.
Applications
for tax relief for the prior years’ taxes can be made to the
municipality in which a property is located. Please note that the
application deadline is the last day of February for relief on the prior
year’s taxes. These applications can provide for tax adjustments
for various reasons including:
 |
assessment
errors
|
|
changes
to the property (including fire and demolition)
|
|
change
to the use of the property.
|
|
eligible
vacant space
|
|
rebates
for charities and eligible not for profit organizations
|
This
article is submitted by Rose Mailloux, National Director, Property Tax
Services, KPMG. Rose can be reached at 519-747-8855.
The
information contained is of a general nature and is not intended to
address the circumstances of any particular individual or entity.
CONSIDER
HIRING AN APPRENTICE FROM A NUMBER OF NEW CO-OP DIPLOMA
APPRENTICESHIP PROGRAMS - FINANCIAL INCENTIVES ARE AVAILABLE!
Offered
at many colleges throughout the province, these co-op programs
combine a college diploma and apprenticeship training.
Co-op Students are available from a variety of trades and
diploma programs such as
These
co-op students have a solid theoretical foundation before
starting their first work term and practical on-the-job
experience before completing the in-school training. Hiring
one of these students means you may be eligible for a tax
credit of $5,000 per student annually. You will also be
investing in employees trained to your standards, increasing
profitability and supporting your industry.
St.
Clair College is one of the participating colleges. For more
information, please contact St. Clair College directly.
The
Ontario Chamber of Commerce recently released Taking
Action on Skilled Trades: Establishing the Business Case for
Investing in Apprenticeship. The report addresses
the need to foster skilled trades and apprenticeship in
Ontario, and estimates that a $10 billion investment over the
next 15 years is needed to fill the need for more skilled
workers.
Tourism Marketing Initiative 2003
The Windsor & District Chamber of Commerce is
supporting the Tourism Marketing Initiative 2003 to promote Windsor
& Essex County as visitor destinations in our largest tourism market
in Michigan. For the Windsor & District Chamber of Commerce letter
of support for the campaign click
here.
Background
From the Information sent to City Council from Mayor
Michael Hurst on May 22, 2003
A report on the impact of SARS on our local tourism
industry was submitted to Council as a communication item on May 5,
2003. At the time this SARS report was forwarded to Council, the Mayor
had already initiated a meeting with the "Border Now Task
Force" which was originally formed as a result of events of
September 11, 2001. This meeting foreshadowed the economic gravity of
being inflicted upon our entire tourism industry.
...As we all know, tourism in Windsor, Essex County
and Pelee Island is vitally important to the economic well being of our
region. This community hosts over seven (7) million visitors annually.
These visitors spend in excess of six hundred and fifty (650) million
dollars and through their tourism expenditures support over 26,000 jobs.
Our local tourism industry is experiencing an
unparalleled series of calamities and events that are having a
profoundly negative impact on our local businesses. As a border
community we have yet to recover from the terrorist attacks that occurred
on September 11, 2001. Since that time we continue to deal with ( real
and perceived) border crossing delays; Iraq War; Anti Canadian
sentiment; weak U.S. economy; SARS and the strongest Canadian dollar
since 1997. To further compound these problems we are now addressing
fears stemming from West Nile Virus, Mad Cow Disease and most recently
the Department of Homeland Security in the United States increased its
terrorism alert to "orange," the second highest risk level.
Unfortunately, all of these circumstances serve to further reinforce
that Canada, and by extension Windsor, is not a desirable destination to
visit.
As a direct result of SARS the provincial and federal
governments have announced multi-million dollar plans to stimulate
traffic to the Toronto region and at the time of this writing are just
now unveiling recovery strategies involving short-term marketing
solutions for tourism destinations throughout the province. As a border
community - the busiest gateway to Canada for American visitors - our
tourism trade is tied into the success of the rest of Ontario and vice
versa. The provincial and federal governments understandably are very
preoccupied with Toronto, which means border communities like the
Windsor/Essex County area have not yet received any direct funding in
terms of these recovery strategy marketing initiatives.
It has now become critical for the local tourism
industry to react with a sense of urgency. A call to action was issued
and as a result, a coalition of local tourism businesses came together
for the purpose of discussing potential solutions that address the
erosion of business activity with our hospitality industry.
A marketing program entitled "Windsor - Get to
Know Your Neighbours Again," was developed and presented by the
Mayor on May 9th in Toronto to the Ontario Minister of Tourism, Brian
Coburn and to the Canadian Tourism Commission (CTC) President, Doug Fyfe.
While both government officials applauded the Windsor initiative, funds
in direct support of this advertising campaign have not yet been made
available.
Our municipality has recognized that as a community we
can no longer afford to wait for any assistance that may be forthcoming
from the senior levels of government. Immediate action is required and
accordingly further meetings with an expanded coalition of tourism
partners were convened.
These meetings showed that hospitality related
businesses were experiencing a dramatic decline in sales ranging from
25% to 30% and that an advertising campaign with a multi media plan of
at least five hundred thousand dollars ($500,000) was essential to
protect the tourism interest of our business community.
Finances:
In support of this campaign the Convention and
Visitors Bureau is committed to reallocating $75,000 of its leisure
advertising budget for this initiative. Although participation is
ongoing, $175,000 has been raised to date from 10 tourism partners.
Through the efforts of the Mayor's office there is the potential of a
further $50,000 to $75,000. The City Council has since approved $250,000
in matching funds for the marketing campaign.
