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New tax rules may not mean much here

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Changes announced by the province Monday that will give municipalities more flexibility in spreading tax increases more evenly across the various business and residential property classes may not make much of a difference here, some town councillors said.

“[Treasurer] Peggy [Dupuis] is working really hard right now to understand the implications of it,” said Coun. Tannis Drysdale, adding this information should be ready for council by a committee of the whole meeting scheduled for tomorrow.

“It may have some small impact in Fort Frances, but our business to residential ratios are some of the highest in the province,” she noted.

“If you move a tax increase from residential to business, that may mean the difference between a business setting up here or in Alberton,” she added.

“[The changes are] not in stone. It’s not something we can budget for in the next few weeks. It’d be nice if it was,” said Mayor Dan Onichuk.

“Would it help? It would give us another choice,” he added. “Whether we want to or not have a tax increase for the commercial sector is another matter.

“We have to think of the downtown core,” he stressed. “Other than large industrial, I don’t think there’s a big willingness to increase taxes for businesses.”

According to the Ministry of Finance announcement Monday, the Ontario government is changing the rules that govern municipal tax rates to ensure homeowners don’t feel the brunt of any increases.

Under the current system, municipalities can’t raise taxes for certain business classes—leaving homeowners to shoulder an unfair share of the burden, Finance minister Greg Sorbara said in a press release Monday.

The changes will give municipalities more flexibility in spreading tax increases more evenly across the various business and residential property classes so that homeowners are treated more fairly.

“With a strong housing market, homeowners in many communities across Ontario have experienced substantial increases in their property assessment,” Sorbara said.

“We are giving municipalities the tools they need to better manage the impact of reassessment on their residential taxpayers,” he added.

The changes will increase taxes on business and “multi-residential” property classes by no more than half of any increase in residential rates, so that businesses also are bearing some of the cost, Sorbara said.

This means a municipality seeking a two percent increase in residential taxes could raise business taxes by one percent.

The changes—if implemented by municipalities—will be revenue-neutral, said Sorbara, meaning they won’t generate any more or less tax revenue for municipalities.

Municipal Affairs and Housing minister John Gerretsen said the changes are a recognition that local governments should be the ones to deal with the impact of higher property value assessments.

“We believe that individual municipalities are in the best position to determine how to deal with the municipal tax impact of higher assessments on homeowners,” he said.

“We are giving them the tools to make those decisions in time for their 2004 budgets.”

—With files from Canadian Press

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