Critics say city’s cultural tax rebate needs work
Proposed 30% rebate would help fewer than 20 buildings and is not a ‘long-term’ fix
Aproposed new commercial property tax subclass intended to foster and preserve cultural activity in the city’s core will fall short of its goals if adopted in its current form, its critics say.
The details of the proposed new tax class, touched off by skyrocketing assessments at 401Richmond St., a storied haven for cultural activity, were delivered in a report by city of Toronto staff this month. It recommends a 30-per-cent rebate for qualifying properties on current commercial property tax rates.
The recommendation was adopted at city council’s executive committee meeting this week and will be put to a council vote next week.
The figure proposed is significantly less than what its proponents had been expecting. Many believed tax relief offered by the new tax subclass would be at least 40 per cent, with its proponents lobbying for as much as 67 per cent, which would bring the properties in question in line with residential tax rates.
Tim Jones, CEO of Artscape, a notfor-profit developer that operates several buildings at below-market rates for culture-sector tenants, said while he was grateful for the work done to establish the new category, in its current form, it would likely be only a stopgap measure at best.
“Our view is, if we’re going to fix this thing let’s fix it; let’s not put a BandAid on it,” Jones said.
One of Artscape’s buildings in the Distillery District has seen its assessed value double in the past five years and its taxes with it. If the next assessment period shows similar gains, the 30 per cent rebate will have been wiped out in a single cycle.
In its report, staff supported the 30-per-cent figure as being in line with other tax breaks, such as those given to heritage properties.
“But aligning the creative subclass on the basis of other reductions, and not what’s actually needed, is not the
“Our view is, if we’re going to fix this thing let’s fix it; let’s not put a Band-Aid on it.” TIM JONES CEO OF ARTSCAPE
best approach,” said Ward 18 Councillor Joe Cressy, who has led the effort to establish the new class.
He called the recommendations “a huge first step,” but said he wanted “something that’s going to last us for the long run.”
The 30 per cent is “a significant improvement,” he said, “but based on the next assessment, that could be blown out of the water. The critical element here is that we’re assigning a tax reduction not based on today’s assessments, but the next 20.”
Cressy said he would be working with stakeholders, as well as the mayor, city staff and the city budget chief to help move the proposed figure closer to what he thinks the proposal needs to achieve its goals.
“I’m committed to not just getting it done, but getting it done right,” he said.
The proposed rebate will also do little to encourage more property owners to turn their buildings into cultural incubators, Jones said, which is one of the stated goals of the new tax class. New commercial buildings are paying commercial tax rates between $10 and $12 per square foot.
“Reducing those rates by 30 per cent only gets you to down to double what set off the alarm bells at 401 Richmond in the first place,” Jones said. “That’s not going to do much to encourage the growth of affordable workspace of the creative community.”
Currently, the proposed new tax class would apply to fewer than 20 buildings citywide.
Still, Jones is hopeful for some movement.
“It’s not a simple issue,” he said. “But we’ve come this far. Let’s find a long-term fix for this thing.”