Most look­ing at $125 tax hike

Agree­ment with min­ing com­pa­nies in Tim­mins helps re­duce im­pact of tax in­crease.

The Daily Press (Timmins) - - FRONT PAGE - LEN GILLIS

The fi­nal res­i­den­tial tax bill in Tim­mins is a few months late, but when it ar­rives in the mail in the next few weeks, the av­er­age res­i­den­tial tax­payer can ex­pect their bill to be up by roughly $125 this year, over last year.

Tim­mins city coun­cil held a special meet­ing Wed­nes­day af­ter­noon to pass sev­eral tax­a­tion bylaws and to set the tax rate for 2017, some­thing coun­cil has not been able to do up un­til now be­cause the city trea­surer has been in hard ne­go­ti­a­tions with the lo­cal min­ing com­pa­nies for sev­eral months.

This is be­cause MPAC (Mu­nic­i­pal Prop­erty Assess­ment Cor­po­ra­tion) had down­graded the as­sess­ments for Large In­dus­trial class to the point where the city felt the as­sess­ments were just too low.

Not only were the as­sess­ments much lower than ex­pected, but the re­sult­ing loss in tax rev­enue from min­ing prop­er­ties would have been dev­as­tat­ing for the city trea­sury, ac­cord­ing to Mayor Steve Black.

“What hap­pened was MPAC came in with a dras­tic swing, and we saw any­where from 30% to 50% … de­creases in large in­dus­trial assess­ment,” said Black.

“This hap­pened across North­ern On­tario in all the re­source cen­tres,” he added. He said the fi­nan­cial hurt is be­ing felt in places such as Sud­bury, Red Lake and even Black RiverMathe­son.

“So we sat down with our com­pa­nies at the start and said guys, we can’t pass this on to the res­i­dents. If we do you’re look­ing at a po­ten­tial 10% in­crease on the res­i­den­tial tax rate just to keep things sta­tus quo,” said Black.

The city had been in ne­go­ti­a­tions since the be­gin­ning of the year and went so far as to launch for­mal ap­peals with the On­tario Assess­ment Ap­peals Board back in March to keep the pres­sure on the min­ing com­pa­nies, in case ne­go­ti­a­tions fell apart.

As things turned out, the big min­ing com­pa­nies in Tim­mins — Glen­core Kidd Op­er­a­tions, Gold­corp Por­cu­pine Gold Mines and Ta­hoe Re­sources — have all signed agree­ments with the city, es­sen­tially com­ing to the res­cue or or­di­nary tax­pay­ers. The agree­ments are for the next four years, which is the length of an MPAC assess­ment cy­cle.

Though the agree­ments are not public doc­u­ments, the min­ing com­pa­nies have agreed to leave money in the city trea­sury to al­low the city to keep pro­vid­ing ser­vices with­out forc­ing a sig­nif­i­cantly higher tax hike. In re­turn, the city agreed not to raise the Large In­dus­trial tax ra­tio to off­set the loss in assess­ment.

“I give the min­ing com­pa­nies credit,” Black said af­ter Wed­nes­day’s meet­ing. “They un­der­stand where we’re com­ing from. They want to see the city con­tinue to pro­vide the qual­ity of life it does for its res­i­dents; the qual­ity of life for their em­ploy­ees,” he said.

“At the same time they wanted some tax sta­bil­ity. They wanted to know they weren’t going to be tied up in as­sess­ments for the next four years,” he added.

Black said the min­ing com­pa­nies have been lob­by­ing for years to get a bet­ter deal on their taxes and then it hap­pened sud­denly in 2017. He said the com­pa­nies seemed to un­der­stand that the de­crease in assess­ment from MPAC was swing­ing the pen­du­lum fur­ther than any­one ex­pected.

On the flip side of the agree­ments, Tim­mins has agreed not to in­crease the tax ra­tio for the large in­dus­trial cat­e­gory for the next four years. Black said the rea­son for that goes be­yond getting a fair deal for this tax­a­tion year.

“We’ve al­ways been on the high end of hav­ing com­pet­i­tive large in­dus­trial tax rates. Th­ese agree­ments now give us the op­por­tu­nity to lower those rates,” he said.

The think­ing is that lower rates will make the city more at­trac­tive for other large in­dus­trial com­pa­nies that are look­ing to set up shop in Tim­mins.

Black men­tioned the Gold­corp Cen­tury Project and the pos­si­bil­ity of Noront Re­sources opening a chromite smelter as two ex­am­ples of why the Tim­mins rate needs to be more com­pet­i­tive and more at­trac­tive to large cor­po­ra­tions.

“So the tax rates that were ap­proved on the res­i­den­tial side show a res­i­den­tial tax rate in­crease of 2.14%. That means each res­i­dent in the city will see a 2.14% in­crease, plus or mi­nus what­ever their (MPAC) assess­ment change was,” said the mayor.

He said if your assess­ment is up by 2%, you will see an over­all tax in­crease of 2.14%. By the same to­ken, if you assess­ment is down by 2%, you would be close a zero net in­crease.

But there is more to it than that. There is also an MPAC in­crease to con­sider.

“If you take the av­er­age of all the houses in the city com­bined, the (MPAC) av­er­age in­crease was 1.5%. So you would add that to the 2.14% and it comes out at an av­er­age in­crease of 3.68% which trans­lates on the av­er­age house­hold to a $125 in­crease ver­sus last year’s tax bill,” said Black.

The tax in­crease does not in­clude the ad­di­tional $50 levy that was im­posed ear­lier this year for sewer and wa­ter ex­penses.

The new tax rate was op­posed by four of the nine mem­bers of city coun­cil.

Coun­cil­lors Pat Bam­ford, Mike Doody, An­drew Marks, Noella Ri­naldo and the mayor were in favour. Coun­cil­lors Joe Campbell, Rick Dubeau, Veron­ica Far­rell and Wal­ter Wawrza­szek all voted against it.

Campbell re­marked that the agree­ment with the min­ing com­pa­nies “less­ened the blow this year” but warned the city may be faced with the same dire sit­u­a­tion four years from now un­less the city does some­thing to at­tract new con­struc­tion and new assess­ment val­ues.

Campbell warned that the city may be able to ser­vice long-term debt right now and for a cou­ple of years in the fu­ture, but that could all change four years from now.

Coun. Dubeau, who lob­bied last win­ter for a 2% bud­get cuts across the board, said the tax rate on the ta­ble Wed­nes­day was un­ac­cept­able.

“Now we’re look­ing at a 3.68% tax in­crease in a world where most peo­ple get less than 2% in wage in­creases and many of them are on fixed in­come,” said Dubeau.

He said he could not vote to ap­prove the rate and sug­gested that coun­cil should put the en­tire bud­get back on the ta­ble to ur­gently find ar­eas where sav­ings could be made.

LEN GILLIS/TIM­MINS DAILY PRESS/POST­MEDIA NET­WORK

Tim­mins trea­surer Jim Howie ad­dresses city coun­cil dur­ing a bud­get pre­sen­ta­tion Wed­nes­day af­ter­noon. has voted by a slim ma­jor­ity to ap­prove a fi­nal tax rate for 2017 which is 2.14%. Com­bined with the av­er­age MPAC in­crease in Tim­mins, it trans­lates into an av­er­age tax in­crease of 3.68% for city res­i­dents. It was re­vealed Wed­nes­day that if the min­ing com­pa­nies had not agreed to leave money in the city trea­sury, the res­i­den­tial tax in­crease could have been as high as 10%.

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