I feel compelled to add further to the issue of railroad right-of-way taxation in Ontario.
The current model of taxation that we are experiencing is a dollars per acre structure. Ontario is the only jurisdiction in Canada that follows this path.
There are different rates for dollars per acre, in different regions of the province—all of them inadequate when compared to other classes of taxed groups in our municipalities.
The rate is reviewed from time to time but seldom increased or adjusted.
Keep in mind that other provinces assess railroad taxation on a tonnes per mile basis. When tonnage increases, so does taxation. Alberta also increases on a yearly inflation rate, or a yearly qualifier.
When our mill began to experience a downturn it its profit margin because the markets for its products were disappearing, they applied to the Assessment Review Board for a reduction of their taxes—and received a favourable consideration in their tax bills going forward.
When businesses reduce or discontinue operations, they can apply for a vacancy rate for their properties and have their taxes reduced. Good for businesses but a hardship for the municipalities.
Fully-functional commercial and industrial properties have applied for and received reductions for their taxes over the last several years, claiming economic hardship partially due to high taxes and obsolescence of the asset.
In a report released just recently, rail traffic and freight has increased by 20 percent every 10 years for the last 30 years. That’s 60 percent! As an example, train traffic over the past 35 years in Fort Frances has gone from four-six trains per day to more than 30.
Profits have followed the trend but taxation of this windfall has not increased one cent.
MPP H.J. Pettypiece stated back in 1904 that “no class of investment in the Dominion of Canada has been so much favoured by the people as that which we call railway investment.”
So, no class of business experiences the tax exemptions that the railways do even to this day!
It is hard to conceive that the most profitable enterprise in Fort Frances, that controls more property than any other taxpayer in town, pays fewer taxes than the corner store or the hairdresser on Scott Street. How is that fair?
Further to this unfairness is what we have to do with the taxation that comes from the railway. When residents pay their tax bill, the revenue goes to the general expenses and operational costs on an ongoing basis.
We recently completed a rebuild and expansion of the underpass that the railroad bestowed upon us as a gift some 65 years ago. At the rate that they pay taxes, we will recoup our cost for that one project in 549 years. And we are embarking on a much-needed repair to the overpass, which will put us back another 233 years.
Plain and simple, we are paying for the railway company to be here and are in a negative position financially while they continue to expand their profit margin.
This is no fault of theirs; it is because Ontario refuses to give municipalities the right to tax railway companies appropriately.
Coun. Ken Perry
Fort Frances, Ont.