Voice of Business: Enforcing Fair Property Tax Ratios
/Businesses in Ontario pay much higher property tax rates than residents, despite using fewer services. The Ontario Municipal Act requires municipalities to tax commercial and industrial properties at a ratio of 0.6 to 1.1, but many municipalities have no plans to comply.
For 2024, the City of Peterborough moved to increase its business tax ratio from 1.5 to 1.65, shifting added tax burden onto the business community in order to minimize the rate increase for homeowners. This trend is causing concern among businesses across Ontario.
The Peterborough and the Kawarthas Chamber of Commerce has put together a policy resolution on this tilted “Enforcing fair property tax ratios” that we have submitted to the Ontario Chamber of Commerce (OCC). It will go to the membership to debate and vote on in April, at which point approved resolutions become part of the advocacy efforts of the OCC for the next three years.
Our resolution:
Commercial and Industrial property taxes in Ontario municipalities are calculated based on a ratio of what residential property owners pay. For example, if a municipality has a commercial tax ratio of 1.75, commercial property owners are paying 175 per cent what a resident is paying for the same amount of property tax assessment.
The Ontario Municipal Act Reg. 386/98: Tax Matters – Allowable Ranges for Tax Ratios sets an allowable range for property tax on commercial and industrial properties at 0.6 to 1.1.
A quick look at tax ratios from a selection of municipalities from across Ontario from 2023 demonstrates that this range is not being followed:
Commercial Industrial
Barrie 1.43 1.51
Milton 1.46 2.09
Peterborough 1.5 1.5
Brantford 1.75 2.25
Guelph 1.84 2.2
North Bay 1.88 1.4
Woodstock 1.9 2.63
Sudbury 1.91 3.45
Belleville 1.92 2.4
Kingston 1.98 2.63
Thunder Bay 1.98 2.37
Clarington 1.98 2.49
Sarnia 2.02 2.4
Niagara Falls 2.15 2.95
Sault Ste. Marie 2.31 4.38