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Region could close tax “loophole” on vacant lands

By Dave Flaherty/The Oshawa Express

The region could potentially see millions of dollars in new revenue if council ultimately chooses to eliminate tax reductions and rebates for vacant and excess properties.
In November 2016, the province announced upper-tier and single-tier municipalities would be given the flexibility to set their own tax rates for such lands classed as commercial or industrial.
Under current provincial provisions, lands classified as vacant/excess industrial receive a 35 per cent property tax discount, while commercial lots see a 30 per cent reduction.
Rebates of the same levels are also offered on eligible vacant units in commercial and industrial lands.
Jim Clapp, commissioner of finance for the region, says approximately 1,100 properties received $5.7 million in discounts last year, with $2.2 million of that representing regional taxes.
In addition, between 2013 to 2015, an average of $2.89 million in taxes was rebated across Durham for vacant units in eligible commercial/industrial properties, including $1.05 million in regional taxes.
“It would really be a redistribution of taxes if you were to close the loophole on these discounts,” Clapp told regional councillors during a meeting of committee of the whole. “It could be redistributed through all classes or a specific class.”
When asked how much money would be put back into the pocket of residential ratepayers should the recouped tax revenue be distributed to that class, Clapp estimated it would equal about $5 per taxpayer annually.
Before council can consider any possible tax rate changes, the region must first consult with the local business community.
These discussions, slated for October and November, will include meetings with local chambers of commerce, boards of trade, business improvement areas, the Ontario BIA and any other organizations that may have previously contacted the region on the matter.
There will also be an information session for members of the public.
Oshawa councillor Amy McQuaid-England slammed the proposed consultation process, calling it “heavily slanted towards the business sector.”
She suggested that members of the public should be invited to meetings between regional staff and the business community because residential taxpayers are “subsidizing” the commercial/industrial property owners receiving tax discounts.
“We are a public body, why are they not public meetings,” she asked.
“There is nothing [from the province] that states these meetings should be private. I think the public should be allowed to hear what happens in these meetings,” England stated, while also suggesting there should  be more than one public information session.
McQuaid-England would later put forth a motion to have all meetings open, which failed without a seconder.
Afterwards, she was not hesitant to state her frustration.
“I’m quite surprised no one on this committee would second a motion to share information with the public…the businesses that are profiting from these tax rates…they are not contributing to our communities.”
Clapp confirmed information from discussions between the region and the business community would be made public while stating he did not see the need for additional public meetings.
“All I’m saying is there is going to be a lot of meetings as there is. I think one public meeting will be reasonable,” Clapp said.

The tax rate reductions can possibly promote “manipulation” of the system by property owners, Oshawa councillor Dan Carter said.
“It’s not encouraging them to invest back into our community.”
However, Oshawa councillor John Aker warned asking property owners to pay more could have consequences.
“If they are paying too high taxes, they could simply demolish the building,” he said, which would deplete the region’s available space for future investment.
As he wants to “avoid situations like that”, Clapp says the consultation process will provide a clearer direction.
“Believe it or not, we do have an open mind on this. There are a lot of arguments on sides of the point.”
Clapp says he is hopeful to have a final recommendation to council on the matter by February 2018.