CambridgeToday received the following letter to the editor from Regional Councillor Doug Craig about accmumulating property tax increases.
Go into any coffee shop in Waterloo Region and you will overhear a wide variety of conversations covering everything from the latest sport scores, to the frustration with local traffic jams, to the activities of porch pirates raiding in the neighbourhood.
Inevitably, those exchanges will always turn to the local economy and the undue pressure that residents feel because of the property tax increases that are accumulating year after year. Yet, these won’t be the only concerns.
Coupled with these issues will be the numbness that settles in as discussions turn towards the needed costs to house the homeless and the relentless upward expenditures required to address addiction issues.
The unsettling truth is that there is not enough financial resources at the municipal level to properly resolve any of these concerns and local taxpayers are exhausted with continual tax increases.
To be honest, the property tax is not a fair tax in the sense that it doesn’t reflect an individual property owner’s ability to pay.
Nor, as studies have shown over the last two decades, does it provide municipalities with the equivalent growth of revenues enjoyed by the federal and provincial governments through their reliance on consumption taxes.
And yet, for Ontario residents this news doesn’t get much better. Communities across the province pay more property tax on average than all other provinces in Canada as a result of the direct downloading onto the cities of a significant number of provincial responsibilities ranging from social housing to public health.
As a note, this downloading strategy leveraged by the provincial and federal governments is a result of the lack of constitutional safeguards afforded municipal politicians. Unfortunately, cities are legislated as “creatures of the province” which renders local politicians completely powerless in any dispute with Queens Park.
Consequently, mayors and city councillors are viewed by many MP’s and MPPs as the poor cousins in our democratic system who need to be managed and supervised with regulatory and legislative edicts. It’s one of the main reasons why the province or federal government can at any time financially batter the local officials with new regulations, expensive legislation and downloading that drives the costs onto the local property tax.
In some ways, it’s reminiscent of the 11th century feudal system when the liege lord ruled with absolute power over all aspects of manor life. Today the wealth of towns and cities is funneled up through various consumption and personal taxes to the the top of the provincial pyramid structure for unquestionable disposal and discretionary use.
Accordingly, municipal politicians have learned over time to remain somewhat quiet about this present arrangement knowing full well that any kind of discord or outcry will result in their communities either being politically shunned or blacklisted. Understanding this one-sided relationship between municipal politicians and the upper orders of government is key to understanding why we are facing such major financial and social difficulties in our communities that cannot be readily resolved.
The solution although not simplistic is straightforward and it requires for us to look through a new lens for needed solutions. To be candid, our residents need tax relief and the only logical source is access to federal and provincial revenues. This doesn’t mean an increase in taxes already being raised, but a sharing on a more equitable basis of the revenues now being collected.
Looking at the present situation, billions of dollars are leaving our regional community annually in the various forms of HST, personal and corporate income tax, land transfer tax, gas tax etc.
Those numbers are staggering and they need to be put on the negotiating table. A good starting point for discussion is the provincial portion of the Harmonized Sales Tax or HST.
Unknown to the residents of Waterloo region, the provincial government extracts $1.6 billion annually out of our communities in HST revenue. It’s our money and it needs to be shared in order to bring relief to local ratepayers.
Looking at allotting one percentage point of the 8 per cent provincial HST would see just over 200 million dollars remain annually in the Region of Waterloo.
On an equitable basis, the region would receive approximately $100 million which would more that cover the annual downloading from the province.
The other $100 million would be evenly distributed annually on a per capita basis to all the cities.
As an example, Kitchener would receive approximately $44 million, Cambridge and Waterloo $23 million each and a township such as Wilmot $3.5 million.
The results would be dramatic and lead to a significant decrease in property taxes across the region and a flatlining of future tax increases in line with inflation for the foreseeable future.
It needs to be acknowledged that because of our constitutional framework in Canada, cities and their legal construction fall completely under the jurisdiction of the provincial government.
This means our five local MPPs have a direct responsibility in solving our local social and financial crises. World class cities have world class revenues and it’s important that our communities have access to revenues such as the Harmonized Sales Tax.
Only then will municipal politicians have the financial tools to properly deal with the gravity of our current social problems while at the same time providing relief to our overburdened property tax payers.
Doug Craig
Cambridge
