There is an opportunity, in light of the recent Supreme Court of Canada decision, negotiate fair compensation for the City of Hamilton that lessens the burden on the property taxpayers of this community.
By Terry Whitehead
Published June 20, 2012
Last Friday marked a very significant day for municipalities across the country. In its ruling on the Halifax Payments-in-lieu of taxes (PILT) case, the Supreme Court of Canada (SCC) ruled that the Government of Canada must pay its PILTs just as citizens and businesses must pay their property taxes.
This reinforces the principles underlying the PILT Act, which argues that the program must provide fairness and equity to communities providing services to federal properties within their jurisdictions.
Currently, the Province of Ontario is using an antiquated tax system (Heads and Beds Tax) to compensate communities for municipal services that the Provincial Institutions in their communities receive - services like Fire, Police, Transportation, Infrastructure and so on.
As all property taxpayers know, these costs have risen significantly in the last 20 years, but the Province of Ontario has not increased their Heads and Beds Tax payments to municipalities since 1987.
So not only are the residents of the City of Hamilton expected to pay provincial tax, you are also burdened with carrying the additional cost to subsidize these provincial institutions on your property tax.
The Association of Municipalities of Ontario (AMO) represents the interests of communities across Ontario. They argue that if you are consuming City services, you should be paying fair compensation for those services.
The AMO has suggested that at the very least, the Provincial payments should be increasing with the cost of living. To date, the Province has not offered any solution.
In the City of Hamilton, we have four hospitals, College and University, just to name some of the institutions that are paying a fraction of what it costs to deliver services to them.
There is an opportunity, in light of the recent Supreme Court of Canada decision, to strike while the iron is hot and negotiate fair compensation for the City of Hamilton that lessens the burden on the property taxpayers of this community.
Certainly, what the Government of Ontario should be paying should be reasonable and fair to both parties.
The cost of inflation would be a reasonable starting point, and consideration should be given to apply the cost of inflation rate retroactively back to 1987.
The Heads and Beds payments to municipalities was established by the Province of Ontario because they understood that they should be paying something towards the services that they consume.
The problem is they have fallen behind by 25 years. You are expected to pay your taxes for City Services and the Province should be expected to pay theirs and not treated differently.
A motion will be going to Hamilton City Council asking the Mayor and AMO to begin negotiations with the Province of Ontario immediately in light of the recent Supreme Court of Canada ruling; and, failing that, to look at the merits of suing the Province of Ontario for tax fairness.
I believe local taxpayers should not be subsidizing Provincial Institutions through Property Taxes.