NAIOP Greater Toronto's Government Relations Committee has had a busy six months at both the provincial and municipal levels. The pace is expected to continue throughout the year. Some of the key issues the committee has been working on include:
Extending the Phase Out of Toronto’s Property Tax Rebate for Vacant Commercial and Industrial Buildings (Vacant Unit Rebate)
Under pressure from municipalities wanting to reduce expenditures, in 2016 the Province of Ontario announced that it would allow municipalities the flexibility to alter or eliminate the Vacant Unit Rebate. As you may recall, the Rebate has provided owners of commercial and industrial properties a 30-35% tax rebate on their vacant units since 1998. Without industry consultation, the City of Toronto decided to eliminate the rebate with a six month phase-out period.
NAIOP, alongside industry partners, reached out to City Staff and Council to underscore the impact such a short phase out period would have on the industry. Following our efforts, the City agreed to double the length of the phase out period to twelve months. Although the rebate’s elimination in Toronto is unfortunate, this longer phase out will give our members more time to offset the impact of this loss.
Successfully Opposing a Storm Water Charge in Toronto
Following the lead of other GTA municipalities, Toronto Council passed a motion in 2015 to add a Storm Water Charge (SWC) to the water bill of all properties. This charge was meant to pay for the City’s storm water management program, which is currently funded entirely from the water rate.
It soon became clear that the SWC would disproportionately impact large properties and those with parking lots. Toronto’s proposed fees also appeared to be substantially higher than those in surrounding municipalities.
NAIOP brought these concerns to City Staff and participated in the SWC consultations. Following our efforts, as well as the efforts of our partner industry associations, City Council decided against moving forward with the SWC. Staff are continuing to review its water billing and cost recovery programs and will be reporting back in Spring 2019. We will continue to monitor this issue as it progresses.
Providing Input into Toronto’s King Street Pilot Project
As the busiest surface transit route in Toronto, King Street is frequently mired in gridlock. To address this ongoing issue, Toronto staff proposed a pilot project between Bathurst and Jarvis Streets that would prioritize transit vehicles.
NAIOP Greater Toronto has been participating in discussions on this proposal through both the Financial BIA’s working group and our own outreach to Staff. Our goal was to ensure the pilot project protected existing uses along King Street (including access for taxis, parking lots, deliveries, etc.) and that it was simple to understand. These efforts included encouraging NAIOP members to respond to a City survey on the proposal, which you did in significant numbers, to help shape the final pilot.
City Council approved the project on July 5th. The final version will see protections for all existing driveways on King Street, as well as spaces on-street provided for short-term loading, deliveries and taxis. The pilot will run from Fall 2017 for approximately one year.
Protecting Toronto’s Imagination, Manufacturing, Innovation and Technology (IMIT) Incentive Program
The City of Toronto is currently reviewing the effectiveness of the IMIT Program as part of a wide ranging analysis into its budget expenditures. As you may know, the IMIT Program is a business incentive that provides eligible developments a tax rebate on the increased value created by the investment over a ten year period.
NAIOP has been actively involved in the review process and has brought in other industry colleagues to underscore the importance of this program. We will continue our efforts with City Staff and Council to ensure they full understand how this helps Toronto attract businesses to the City.
Working Towards a Fair and Uniform Business Education Tax in Ontario
Despite equalizing the residential education tax in 1998, ensuring that all Ontarians pay the same rate, the provincial government still has not harmonized the Business Education Tax (BET). There are 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 in education taxes than residential properties of the same value – 33% more than businesses in Halton Region - without receiving additional services.
To address this inequity, NAIOP Greater Toronto is working with our industry association colleagues to obtain a provincial commitment to a uniform and fair BET rate across the province. While our efforts are still in the early stages, we expect this work to continue throughout 2017.
Participating in Toronto’s Development Charge Review
The City of Toronto has begun its 5-year review of the Development Charges (DC) Bylaw. This review sets out the City’s projected costs for growth-related infrastructure, which is then used to determine the fees charged to new development projects.
This year the City has decided to re-examine the non-residential DC exemption as part of the review. As you may know, non-residential development is mostly exempt from DCs. The review of this exemption has significant implications for our members and NAIOP is actively engaged alongside BILD and REALPAC in this process. We will keep you updated as we move forward on this issue.
Campaigning to Reduce the Commercial-to-Residential Property Tax Ratio in Toronto
Since 2005, the City of Toronto has been committed to reducing the commercial-to-residential property tax ratio to 2.5:1 by 2020 (i.e. commercial properties would pay 2.5 times the residential property tax rate). This has resulted in annual decreases to the ratio, as well as increased jobs and investment in the City. However, due to budget constraints, City Council made the decision to move away from this reduction program this year – and has not committed to returning to it.
To help keep Toronto competitive, NAIOP has been working closely with a number of business and industry organizations on a joint initiative to get Toronto back on track with the ratio reduction. Further details will be announced shortly.
NAIOP's November 9th Event, "Toronto's Transit Transformation"
Following the success of last year’s members’ forum with Toronto’s Chief Planner Jennifer Keesmaat and Oxford Properties CEO Blake Hutcheson, the Government Relations Committee will be hosting another event on November 9 to discuss “Toronto’s Transit Transformation”.
Two of the key leaders guiding this transformation will be joining us. Mark your calendar for November 9 and join in the discussion with Councillor Josh Colle, Chair of the TTC, and Bill Henry, President of Crosslinx Transit Solutions, who heads up the consortium of companies building the Eglinton LRT system.
Watch the CHAPTER EVENTS site for upcoming details.