Steep property taxes increases for next year has several Ontario municipalities seeking change in how tax dollars are divided to curb such a rise again.
Cities such as London, Mississauga, Hamilton and Burlington are sounding the alarm, saying deals struck over 100 years ago with the federal and provincial governments are out of date and aren’t matching the level of population growth.
“It didn’t happen overnight, and it certainly didn’t happen just with this government, but over the past, I’d say 10 and 20 years, increasing responsibility for social service delivery and health-care infrastructure has been downloaded to municipalities to look after,” chair of Ontario Big City mayors and Burlington mayor Marianne Meed Ward said.
“Even where we have cost-shared agreements with, let’s say, the province for the delivery of social services, they haven’t kept up with growth.”
For 2024, Burlington is looking at a 5.97 per cent property tax increase, while communities like London are reporting a 7.3 per cent increase. Others like Mississauga are projected to come in over nine per cent, Windsor at 6.4 per cent increase, and Hamilton 6.9 per cent.
Unlike the province or federal government, municipalities are unable to carry a deficit, so in order to provide basic services, money needs to come from somewhere — the main source being property taxes.
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Municipalities receive between eight to 10 cents of every dollar collected in taxes at all levels, but the president of the Federation of Canadian Municipalities notes that they are responsible for 60 per cent of all infrastructure.
“We are seeing this increase in property taxes, and what it speaks to really is a need for a modernized fiscal framework for local governments to fund these much-needed services in their communities,” said Rebecca Bligh.
Meed Ward said population growth, due in part to immigration, is straining services like housing, wastewater, and transit.
She notes that while Burlington’s population was projected to reach 185,000 by 2031, it has already surpassed 200,000.
Other communities like London are experiencing similar growth, with London’s Mayor Josh Morgan advocating for funding to be tired to things like economic growth.
“In a city like London that has been growing and contributing to economic growth in this country, we don’t see any fiscal benefit from that at the city level, certainly our businesses do and our citizens do, but not the municipality,” he said.
“It would be nice to partake in some of that growth related activity so that as the city grows, we would be receiving additional revenues to cover off those costs rather than having to find a way each and every year to make ends meet or ask other levels of government for support and help.”
Meed Ward had similar sentiments, advocating for a funding source that grows with their economies to help keep up with the demand for new services.
“We don’t get a share of income tax, we don’t get a share of HST, or when sales and economic activity goes up. So that is something that is being considered because so much of the cost pressures that we face are related to growth, economic growth and population growth,” she said.
She added municipalities nowadays are being asked to fund things like housing, transit and roads, which she said used to be covered by the federal government.
“We are asking federal and provincial governments to step back into funding what they’re responsible for and to really rethink what this relationship looks like,” said Meed Ward.
In order to change the tax system, both the provincial and federal governments need to be willing to negotiate, Bligh said, adding that while they have heard from several officials on the issue, nothing concrete has happened.
Global News reached out to the Federal Ministry of Finance but did not hear back by publication.
Peter Bethlenfalvy, Ontario’s finance minister, recently spoke about the issue.
“No government that I’m aware of has done more for municipalities. We’ve increased the funding by 45 per cent transfers over the last five years, that’s about 10 per cent a year on top of a whole bunch of other things,” he said on Nov. 28.
Both the Ontario Big City Mayors, and the Federation of Canadian Municipalities, are calling for more guaranteed funding given cities are bogged down reviewing new funding streams every time a government announces ones.
“That process takes months, and it is not. We can’t plan major infrastructure projects and count on that funding being there,” she said.
“We could unlock millions more if we cut that… red tape (and get) a greater share of taxes going to municipalities,” Meed Ward said.
‘It didn’t happen overnight’: Why property taxes are skyrocketing in some Ontario cities
