City Centre Mirror
The Toronto Taxpayers Coalition has given contest participants an opening that is hard to refuse: "Lower taxes are good for Toronto because ..."
Low property taxes are, in fact, good for Toronto taxpayers, as they are for any taxpayer. They allow fixed income seniors who own houses purchased years ago to stay in their homes longer. Home buyers consider lower tax rates when purchasing, and so offer a premium in low tax areas. And taxpayers vote for representatives promising low rates of taxation.
With a residential tax rate about 20 per cent lower than in Mississauga and about 25 per cent lower than in Markham, Torontonians should be the happiest folks around.
A few will argue that since Toronto's home values are higher than in surrounding cities, Torontonians actually pay more.
Perhaps at one time, Toronto's property taxpayers did pay more, but present reality is different.
Average home prices in Mississauga are about $430,000, much higher than in Scarborough and most of Etobicoke. In Markham, the average price is about $540,000, only about five per cent less than in Etobicoke's premium Kingsway district.
So the average home-owning resident of Mississauga pays about $700 more in property taxes than in neighbouring Etobicoke. It's about the same difference between Markham and the Kingsway areas. Both of the higher tax jurisdictions have experienced greater sales growth than Toronto has.
It is a fair argument that property taxes raise relatively little: about $22 million for each percentage increase. Much more importantly though, property taxpayers are very effective at defending their interests.
While Torontonians have achieved a lower residential tax burden than residents in surrounding areas have, they receive more subsidized municipal services. From libraries, to transit and environmental programs, Toronto's services are among the highest in Ontario.
With Toronto's services at a high level, and residential property taxes low, then we can expect a number of consequences.
First, it is not surprising that higher tax burdens have been shifted to tenants and businesses. Next, reserves have been run down. And finally, Toronto is at the front of the line when it comes to getting funds from other levels of government. All this is a good description of Toronto's financial position.
By focusing on low property taxes, advocates are constraining just one side of the municipal finance equation. One cannot have low taxes, premium services paid by the city, a social safety net and a stable balance sheet.
In short, what is good for some Torontonians is not necessarily good for Toronto.