Item - 2014.EX37.3

1.         City Council approve a 2014 property tax levy increase reflecting a 2.23% residential increase, composed of a 1.73% 2014 budgetary levy increase and a 0.50% levy increase for the Scarborough Subway; and a 0.75% non-residential increase, composed of a 0.58% 2014 budgetary levy increase and a 0.17% levy increase for the Scarborough Subway.

To give effect to Part 1 above, current value assessment (CVA) and associated tax policy shifts, City Council approve the following:

2.         City Council adopt the 2014 tax ratios shown in Column II for each of the property classes set out below in Column I.

3.         City Council continue the previous adoption of two bands of assessment of property in the Residual Commercial property class, for the purposes of facilitating graduated tax rates for the Residual Commercial property class in 2014 as set out in the Enhancing Toronto's Business Climate initiative, and setting such bands of assessment for each band shown in Column II at the amount shown in Column III, and setting the ratio of the tax rates for each band in relation to each other at the ratio shown in Column IV.

4.         City Council approve a 2014 property tax levy increase of 2.23% for residential, new multi-residential, pipeline, farmlands and managed forest (composed of a 1.73%  2014 budgetary  levy increase and a 0.5% levy increase for the Scarborough Subway), and 0.75% for commercial, industrial and multi-residential (composed of a 0.58% 2014 budgetary levy increase and a 0.17% levy increase for the Scarborough Subway) by adopting the 2014 tax rates set out in Parts 4a. and 4b. below:

a.                   City Council adopt the tax rates set out below in Column IV, which rates will raise a local municipal general tax levy for 2014 of $3,762,088,951, inclusive of an approximate 1.73% residential, new multi-residential, pipeline, farmlands and managed forest tax rate increase, and an approximate 0.58% commercial, industrial, and multi-residential tax rate increase; and

b.                   City Council adopt the additional tax rates set out below in Column V, which rates will raise an an additional local municipal general tax levy of $12,206,673 (inclusive of an approximate 0.5% residential, new multi-residential, pipeline, farmlands and managed forest tax rate increase, and an approximate 0.17% commercial, industrial and multi-residential tax rate increase) for the purposes of funding the City’s share of the cost of construction of the Scarborough Corridor Subway, in accordance with Council's direction through Clause CC39.5 adopted by City Council on October 8, 2013.

5.         City Council determine that the 2014 Non-Program Tax Account for Rebates to Charities in the Commercial and Industrial Property Classes be set in the amount of $6,579,482 to fund the mandatory 2014 property tax rebates to registered charities in the commercial and industrial property classes, which provision is to be funded, for a net impact on the 2014 operating budget of zero, by the following:

a.                    The additional tax rates set out below in Column III be levied as part of the general local municipal levy on the commercial classes set out in Column I and Column II to raise a further additional local municipal tax levy of $6,381,597 to fund the total estimated rebates to registered charities for properties in the commercial classes in 2014.

b.                   An additional tax rate of 0.0025536% be levied as part of the general local municipal levy on the industrial class to raise a further additional local municipal tax levy of $197,885 to fund the total estimated rebates to registered charities for properties in the industrial class in 2014.

6.         City Council determine that for the purposes of the Capping and Clawback of taxes in the commercial, industrial and multi-residential property classes:

a.         City Council adopt the continued limiting of reassessment-related tax increases for the commercial, industrial, and multi-residential property classes at a cap of 5% of the preceding year’s current value assessment taxes for the 2014 taxation year; and

b.         City Council adopt the continued removal of properties from the capping and clawback system once they have reached their full CVA-level of taxation for the 2014 tax year.

7.         City Council direct the Deputy City Manager and Chief Financial Officer to report to the Executive Committee at its meeting scheduled for April 23, 2014, on the 2014 tax rates for school purposes, and the 2014 percentage of the tax decreases required to recover the revenues foregone as a result of the cap limit on properties in the commercial, industrial and multi-residential property classes (the 2014 ‘clawback’ rates).

8.         City Council determine that for the purposes of the comparable property tax treatment for new construction in the commercial, industrial and multi-residential classes the minimum property taxes for new construction be set at 100% of the full uncapped CVA level of taxes for 2014 and future years.

9.         City Council determine that:

a.         the instalment dates for the 2014 final tax bills be set as follows:

i.          the regular instalment dates be the first business days of July, August and September;

ii.         for taxpayers who are enrolled in the monthly pre-authorized property tax payment program, the instalment dates be the 15th, or first business day thereafter, of each of the months of July to December; and

iii.         for taxpayers who are enrolled in the two installment program, the final instalment date be July 2, 2014;

b.         the collection of taxes for 2014, other than those levied under By-law No. 1483-2013 (the interim levy by-law) be authorized; and

c.         a penalty charge for non-payment of taxes of 1.25 percent of taxes due and unpaid be added on the first day of default, and interest be charged at a rate of 1.25 percent per month on all outstanding taxes accruing from the first day of default.

10.       City Council direct the Deputy City Manager and Chief Financial Officer to re-design the City's tax bill, for 2014 and future years, to incorporate a separate line on the bill to capture the Transit Expansion tax rate and associated tax levy, as part of the general tax levy.

11.       City Council request the Deputy City Manager and Chief Financial Officer to report to the Executive Committee on the feasibility and implications of amending the City's Tax Increase Cancellation and Tax Increase Deferral Programs, by amending the eligibility requirement that the property be owned solely by one or more eligible persons, to account for situations where another family member co-owns the property but does not reside at the property or contribute financially to it.

12.       City Council request the Deputy City Manager and Chief Financial Officer to report to the Executive Committee prior to the 2015 budget process on a new transparent process that ensures that the Current Value Assessment (CVA) and associated tax policy shifts are estimated in the tax rate information that is provided to Councillors and the public at the time of Budget Launch.

13.       City Council authorize the appropriate officials to take the necessary action to give effect to Council's decision and authorize the introduction of the necessary bills in Council.