It’s budget time again, and while we seem to have shaken off the days of zero percent, we haven’t yet outlived the years of paying for them. Just as predicted, catching up comes with some sticker shock, and a number of arguments that favour keeping London property taxes low.
For me, the most compelling argument against increases is that London has a number of residents on fixed incomes for whom it will be a hardship. For such people, Ontario offers a property tax credit through which households can receive up to $924 this year. It won’t fully offset an increase, but income-related property-tax lobbying might be best directed toward the province, which has an ability to adjust and add nuance to those calculations.
For the city, accommodating the needs of those who can’t afford a property tax increase means leaving much-needed money from everyone else on the table. And the worst part of that short-term win? It’s the services that support a better quality and equity of life for low-income families that suffer most without adequate funding.
To maintain basic services, a moderate increase is required each year to cover rising costs, which is the basis for many people supporting property tax increases that match inflation. The flaw in this logic is probably hard for officials to openly address because what it doesn’t recognize is that many city services weren’t so great last year.
Basing our new budget on the cost to run services that were sub-par last year, plus inflation, will result in running sub-par services again this year. We need to stop considering potential budget increases under the assumption that everything was adequately funded and effective last year. It wasn’t.
What sub-par service means is that we really aren’t competitive with other cities of our size. It sounds great to say that Londoners pay an amount of property tax that’s in the bottom half of Ontario cities with populations over 100,000. It seems like it gives us an edge that London is a cheap place to live.
But let’s look a little deeper into that: the average population of the other cities in that lower half is about 140,000. London is more than double that size, and collecting an amount of property tax somewhere in the middle of the pack. That doesn’t say we’re being competitive. It says we’re playing in the wrong league.
If you look at the stats, cities like Toronto and Ottawa, who we should be running with, are in the top third. Their properties are valued higher, their revenue is higher, and their services are inarguably more robust.
Markham residents pay the highest property taxes in Ontario, but the difference in taxes between an average home in London and an average home in Markham, is under $2,000 a year. That amount is not enough to be a deciding pull factor for the skilled talent pool London is trying to attract, but collectively, it is enough to undermine our ability to offer a competitive level of service and quality of life.
It’s much the same story when it comes to commercial and industrial tax rates. While I understand the theory that being very affordable will attract newcomers, I think we have to ask ourselves one very important question: how’s that working out for us so far?