NAIOP Greater Toronto Chapter’s Government Relations Committee speaks for the commercial real estate industry at the municipal and provincial levels. Working with our outside government relations advisors, industry partners, and BIAs, we ensure that public policy decision makers understand and respond to the concerns of NAIOP members. Public policy decisions can have an enormous impact on our industry, so we make sure the industry has a seat at the table.
While the issues change, some of the key issues we’re focused on now include:
Commercial-to-Residential Property Tax Ratio
In 2005 the City of Toronto committed to annual reductions of the commercial-to-residential property tax ratio, with a goal of reaching a 2.5:1 ratio by 2020 (i.e. commercial properties would pay 2.5 times the residential property tax rate). This policy has led to increased jobs and investment in the City.
However, due to budget constraints, City Council decided to move away from this target in 2017 and has not committed to returning to it.
To help keep Toronto competitive, NAIOP Greater Toronto Chapter is part of the ‘Property Tax Coalition for Growth’ to get the City back on track. With our partners we created “The Point One Plan” to reduce the ratio.1 each year, starting in 2019.
Potential Electromagnetic Field Interference stemming from GO Train Electrification
Commercial property owners and managers adjacent to the Union Station Rail Corridor are worried that the planned Metrolinx GO Train electrification may cause harmful spikes in the electromagnetic field. They are concerned about the potential impact on tenants.
NAIOP has partnered with the Toronto Financial District BIA, Entertainment District BIA, BOMA and property owners/managers along the corridor to address these concerns with Metrolinx.
Provincial Business Education Tax
While the Province equalized the residential education tax in 1998, ensuring all Ontarians pay the same rate, it did not harmonize the Business Education Tax (BET) at the same time. This has led to wide discrepancies between municipalities with businesses paying significantly higher rates for the same level of benefit.
For example, Toronto commercial properties pay 6.3 times more than businesses in Halton Region – without receiving additional services.
Along with our ‘Property Tax Coalition for Growth’ partners, we have engaged City of Toronto and provincial decision-makers regarding our proposal to harmonize the BET. Our advocacy on this issue continues as we work to obtain a commitment to implement a uniform and fair BET rate across the province.
Highest-and-Best-Use (HABU) Assessment Issue for Toronto’s Downtown
Some Toronto businesses have received re-assessments that have led to extraordinary property tax increases (approximately 500 in over 40,700 commercial properties saw increase of 50% or more). This issue has garnered significant media and political attention.
To address this issue, the City of Toronto expanded its capping and claw-backs program and is considering further changes (such as small business tax class) later this year. Neither of these decisions will resolve the underlying problem: properties being improperly assessed using a highest-and-best-use evaluation.
As part of the ‘Property Tax Coalition for Growth’, NAIOP is working on a potential solution to resolve this issue without placing undue burdens on certain sectors of the industry.
Education Development Charges
The Toronto Catholic District School Board (TCDSB) is proposing a significant increase to its Educational Development Charges (EDCs). The current proposal would see an approximate 650% increase to the non-residential rate. NAIOP is deeply concerned about this proposal and is supporting our colleagues at BILD in their efforts to oppose this increase.
NAIOP Greater Toronto Chapter actively participated in the City’s TOcore planning review on behalf of the commercial development industry. The goal of TOcore is to draft a new secondary plan for Toronto’s Downtown that will set a 25 year vision for the area.
The plan was adopted by City Council during its May 2018 meeting.