Earlier this week, CME wrote to the Premier concerning Industrial Property Tax Rates and the need for Industrial Property Tax Reform in Ontario ahead of the 2019 budget. View the letter here. Our recommendations are as follows:
1. Freeze any downward revision to functional or economic obsolescence allowances in MPAC’s current value assessment on all industrial properties for the next valuation cycle until the valuation methodology is clarified and revamped.
2. Provide property tax abatements in order to drive plant expansions, upgrades or new investments.
3. Resume the provincial BET reductions with a plan to fully phase out the BET on large industrial properties. This will help level the playing field relative to competition in the United states.
4. Equalize property tax rates across business classes. This would level the playing field across all business sectors in the province.
5. Undertake a full review of the property tax system, including MPAC’s valuation practices such as functional and economic obsolescence, and the failure to recognize arm’s length transactions, to ensure fairness and to take into account competitiveness issues and the province’s growth-policy objectives.
This was an issue that we touched on in some detail in our Industrie 2030 Ontario Manufacturing Strategy Paper. We included this issue in the paper based on input from you, our members and to help begin a conversation on an issue that has greatly impacted manufacturing investment and competitiveness in the province.
We have listened to you our members that this is an issue that is of top of mind for you at this time. Given that, in the coming days, CME will be meeting with political staff at relevant Ministries and within the Premier’s office to advocate of you our members on this issue. We are also currently exploring options at developing a short property tax report with a tax firm that showcases this issue in great detail, provides research and analysis and outlines key initial recommendations. The report findings will serve as the foundation of our policy and advocacy efforts on this file in the coming weeks.
We would welcome your input and policy recommendations on this issue at the earliest convenience. We would also welcome any stories, data and analysis that you can share with us as to how high property tax rates, Ontario’s overall property tax policies and the Municipal Property Assessment Corporation’s (MPAC) valuation practices have affected your business and overall operations.
Finally, if you are interested in joining our working group on this issue, please contact Alex Greco to express your interest.