May 23, 2003

Your guide to what happened at City Hall

Special City Council Meeting Highlights

City Council votes to give grants to homeowners facing property tax increases due to provincial tax rules

City Council voted today to redirect funds from the 2003 budget to help Ottawa homeowners who were facing increases in their property tax bills in the form of grants to be issued in early summer. Although City Council froze taxes for the third year in a row in January - and is the only major municipality in Ontario that has not had a property tax increase in the last three years - many residents would have seen an increase in their bills caused by increases in property values and Provincial legislation that protects commercial taxpayers at the expense of homeowners.

Over $20 million will be taken from various program cuts, capital program deferrals, works-in-progress and used to fund a one-time grant from the City to those non-commercial homeowners facing an increase.

"City Council found a 'made in Ottawa' solution for a 'made in Queen's Park' problem," said Mayor Bob Chiarelli. "It is absolutely unfair for residential property taxpayers to have to subsidize provincial tax breaks for businesses - especially when the City has held the line on taxes. But this is a short-term local solution to a very big problem faced by property taxpayers across Ontario."

In order to find longer-term solutions to the inequities of the current property tax system, City Council also directed the City staff to work with the Association of Municipalities of Ontario and other local governments across the province to propose changes that will lead to overall property tax fairness. Staff will also look at what legal options may be available to challenge the Province's tax legislation.

"The whole system is broken and needs to be fixed - and Ottawa will be taking the lead on that too," said the Mayor. "Only an overhaul of the current tax legislation will protect taxpayers in the future"

2003 was an assessment year, and Ottawa's strong housing and real estate market meant that many property owners were seeing a major increase in the value of their properties due to assessment - an average of 22% across the city. On May 14, 2003, City Council lowered property tax rates by 15% to offset some of the impact of increased assessments for residents. But because provincial legislation only allows the City to shift more of the burden away from businesses, and because residential taxpayers do not have the protection of a 5% cap on increases like the business classes, the average homeowner would still have paid about 6.5 per cent more in property taxes this year had Council done nothing.

City Council's 2003 tax grant will reduce the impact on the average residential taxpayer of the 6.5 per cent increase from property assessment. Because of this grant, more than 72 per cent of homeowners will now see either no change or a reduction in their property taxes.

The savings identified during today's special meeting of City Council will be passed on in the form of a tax grant cheque that will be mailed to every non-commercial residential property taxpayer facing an increase in early summer.

Intro