City’s Tax Freeze Record Doesn’t Impress Business
I offer this as a heads up to certain City of Windsor Mayors and Councillors who have dislocated shoulders thumping themselves on the back for delivering eight consecutive property tax freezes.
The Canadian Federation of Independent Business (CFIB) is gearing up for release of another possibly damaging report, right before the next municipal election, highlighting the gap between the city’s residential and commercial property taxes.
Just prior to the last election in 2014, the CFIB unveiled a report on the tax gaps of 230 municipalities. Windsor had the fifth worst gap in the country, which was a headline grabber in these parts.
Final 2013 property tax rates were used, which exposed Windsor as levying small business double the residential rate, a discrepancy described by the CFIB as distorted and unfair.
Windsor commercial property owners, on average, paid 2.00 times the residential rate of 1.00, outlined the 2014 report. With City Council set to consider its annual review of tax ratios this April, I can report that the 2-to-1 ratio approximately remains the same.
Unfortunately, I would be surprised if anything changes. City Councillors know that home owners vastly outnumber business owners who vote in municipal elections. They are thus terrified of shifting a small portion of the tax burden, even if it was phased in over a number of years, onto the residential class.
Still, the city is loath to talk about ratios. When I asked for them, the communications department sent me instead a graph comparing the cost per square foot of Windsor commercial properties compared to 23 other municipalities in Ontario with populations greater than 100,000.
Windsor, as you might imagine, fares very well in the square footage measurements, as compiled in 2016 by the BMA Management Consulting firm. In fact, it finished the lowest in the office buildings class at $2.17 per square foot and in the neighbourhood shopping category at $3.40 per square foot.
To arrive at the actual taxes paid, you have to multiply the assessed value of the property, as set by the Municipal Property Assessment Corporation (MPAC), by the tax rate set by the municipal council.
Since Windsor property values are among the lowest in the province, the city sets its tax rates high to garner enough revenue to pay for the bureaucracy and services it claims it needs.
Chief Administrative Officer Onorio Colucci has taken pains over the years to explain this to taxpayers who rail about the city’s high tax rates, notably the commercial occupied class saddled with a 0.03300265 rate compared to the residential rate of 0.0168447.
Since those kind of decimals are difficult to digest, I asked a few local property owners and realtors if they felt Windsor’s commercial taxes are fair, or detrimental to a thriving small business community.
I received mixed reviews. Lou Mikhail, Co-Owner of the CIBC building on Ouellette Avenue, says Windsor’s commercial office taxes “are in line with a lot of municipalities.”
He says it is impossible to compare our rates to Toronto. In Windsor the fair market value for a 114,000 square feet office tower is $8 million whereby the same structure in Toronto can be worth $80 million.