Item - 2017.EX25.10
Tracking Status
- City Council adopted this item on May 24, 2017 with amendments.
- This item was considered by the Executive Committee on May 16, 2017 and adopted without amendment. It will be considered by City Council on May 24, 2017.
EX25.10 - Future of the City's Vacant Commercial and Industrial Tax Rebate Program
- Decision Type:
- ACTION
- Status:
- Amended
- Wards:
- All
City Council Decision
City Council on May 24, 25 and 26, 2017, adopted the following:
1. City Council request the Province of Ontario to adopt regulations and make any other legislative amendments required to adjust the vacancy rebate program as follows:
a. for the period January 1 to June 30, 2017, the applicable rebate percentage for qualifying vacancies be set at 30 percent for properties in any of the commercial tax classes, and 35 percent for properties in any of the industrial tax classes;
b. for the period July 1, 2017 to June 30, 2018, the applicable rebate percentage for qualifying vacancies be set at 15 percent for properties in any of the commercial tax classes, and 35 percent for properties in any of the industrial tax classes;
c. effective July 1, 2018, the vacancy rebate program for commercial and industrial properties be discontinued; and
d. that the Minister of Finance prescribe a deadline date of February 28, 2018 for receipt of applications for vacancies occurring in 2017, and a deadline date of September 28, 2018 for receipt of applications for vacancies occurring in 2018.
2. City Council approve that, for the 2018 taxation year, the final municipal tax rates for the industrial classes be reduced by an amount equivalent to half of the estimated municipal portion of industrial taxes to be rebated under the vacant unit program for 2017, with the other half to be reduced in 2019.
3. City Council request the Province of Ontario, in setting Toronto's education rates for 2018, to reduce the commercial and industrial education tax rates by the estimated amount of the education portion of rebates that would have otherwise been rebated within each of the commercial and industrial property tax classes respectively, or alternatively, that these amounts be directed to the City of Toronto for reinvestment in accordance with Parts 5 and 6, below.
4. City Council authorize the Treasurer to forward the report (May 5, 2017) from the Treasurer and the General Manager, Economic Development and Culture and Council's decision to the Ontario Minister of Finance and to provide any additional information required to clarify the intent of the adoption of Parts 1 and 3, above.
5. City Council request the General Manager, Economic Development and Culture to report back to the Economic Development Committee prior to the release of the 2018 Budget on proposals that would see a portion of the reduction in rebate expenditures reinvested in programs or initiatives designed to stimulate economic growth and job creation by enhancing local retail areas that are challenged by high vacancy rates.
6. City Council request the Deputy City Manager and Chief Financial Officer report within the context of the 2018 Budget Process on a plan to reinvest the remainder of the reduction in rebate expenditures, in programs or initiatives that support Toronto's poverty reduction strategy and to balance the tax-supported budget.
7. City Council request the Treasurer and the General Manager, Economic Development and Culture to report to the Budget Committee on the financial and other implications of changes to the tax rates for the Commercial and Industrial Vacant Land and Excess Land Subclasses as part of the 2018 Budget Process.
8. City Council authorize the introduction of any necessary by-laws to give effect to City Council's decision.
Background Information (Committee)
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103448.pdf
Attachment 1 - Summary of Vacant Commercial and Industrial Property Information from 2001 to 2015
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103633.pdf
Attachment 2: Copies of written submissions received: a. Railway Association of Canada, dated March 22, 2017; b.Toronto Industry Network, dated April 4, 2017; and c. Toronto Real Estate Industry Coalition, dated May 2, 2017
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103634.pdf
Attachment 3 - Summary of Stakeholder Consultations
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103635.pdf
Attachment 4 - Summary of Survey Results
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103636.pdf
Motions (City Council)
That City Council amend Executive Committee Recommendation 5 by deleting the words "within the context of the 2018 budget process" and inserting the words "to the Economic Development Committee prior to the release of the 2018 budget" so that it now reads as follows:
5. City Council request that the General Manager, Economic Development and Culture, report back to the Economic Development Committee prior to the release of the 2018 budget on proposals that would see a portion of the reduction in rebate expenditures reinvested in programs or initiatives designed to stimulate economic growth and job creation by enhancing local retail areas that are challenged by high vacancy rates.
EX25.10 - Future of the City's Vacant Commercial and Industrial Tax Rebate Program
- Decision Type:
- ACTION
- Status:
- Adopted
- Wards:
- All
Committee Recommendations
The Executive Committee recommends that:
1. City Council request that the Province of Ontario adopt regulations and make any other legislative amendments required to adjust the vacancy rebate program as follows:
a. for the period January 1 to June 30, 2017, the applicable rebate percentage for qualifying vacancies be set at 30 per cent for properties in any of the commercial tax classes, and 35 per cent for properties in any of the industrial tax classes;
b. for the period July 1, 2017 to June 30, 2018, the applicable rebate percentage for qualifying vacancies be set at 15 per cent for properties in any of the commercial tax classes, and 35 per cent for properties in any of the industrial tax classes;
c. effective July 1, 2018, the vacancy rebate program for commercial and industrial properties be discontinued; and
d. that the Minister of Finance prescribe a deadline date of February 28, 2018 for receipt of applications for vacancies occurring in 2017, and a deadline date of September 28, 2018 for receipt of applications for vacancies occurring in 2018.
2. City Council approve that, for the 2018 taxation year, the final municipal tax rates for the industrial classes be reduced by an amount equivalent to half of the estimated municipal portion of industrial taxes to be rebated under the vacant unit program for 2017, with the other half to be reduced in 2019.
3. City Council request that the Province of Ontario, in setting Toronto's education rates for 2018, reduce the commercial and industrial education tax rates by the estimated amount of the education portion of rebates that would have otherwise been rebated within each of the commercial and industrial property tax classes respectively, or alternatively, that these amounts be directed to the City of Toronto for reinvestment in accordance with Recommendations 5 and 6.
4. City Council authorize the Treasurer to forward the report (May 5, 2017) from the Treasurer and the General Manager, Economic Development and Culture and Council's decision to the Ontario Minister of Finance and to provide any additional information required to clarify the intent of the adoption of Recommendations 1 and 3.
5. City Council request that the General Manager, Economic Development and Culture, report back within the context of the 2018 budget process on proposals that would see a portion of the reduction in rebate expenditures reinvested in programs or initiatives designed to stimulate economic growth and job creation by enhancing local retail areas that are challenged by high vacancy rates.
6. City Council request the Deputy City Manager and Chief Financial Officer report within the context of the 2018 budget process on a plan to reinvest the remainder of the reduction in rebate expenditures, in programs or initiatives that support Toronto's poverty reduction strategy and to balance the tax-supported budget.
7. City Council request the Treasurer and the General Manager, Economic Development and Culture to report to the Budget Committee on the financial and other implications of changes to the tax rates for the Commercial and Industrial Vacant Land and Excess Land Subclasses as part of the 2018 budget process.
8. City Council authorize the introduction of any necessary by-laws to give effect to the foregoing.
Origin
Summary
In 2016, the Ontario Ministry of Finance, as part of the Special Purpose Business Property Assessment Review (SPBPAR), conducted consultations on possible amendments to the Municipal Act/City of Toronto Act provisions surrounding vacancy rebates, both with a municipal reference group and a business reference group (commercial/industrial property owners and advocacy groups).
On November 14, 2016, the Province released its Fall Economic Statement that provided additional tax policy flexibility to municipalities. Municipalities may now tailor their business property tax programs such as the Vacant Commercial and Industrial Unit Rebate (VUR) and Vacant/Excess land subclass tax reductions to meet local municipal objectives.
On February 15, 2017, Toronto City Council adopted Motion 313. The motion proclaims Council's intention to request the Minister of Finance to allow the City to reduce the allowable rebate percentage for the vacant unit rebate program for commercial and industrial properties by 50 percent, effective July 2017 and to eliminate the program entirely in 2018. Motion 313 also directed staff to report back on possible re-investment opportunities. The Province requires municipalities to engage in consultations and to obtain a Council resolution before changes to the vacant unit rebate program are approved.
This report responds to the direction of City Council to eliminate the Vacant Unit Rebate (VUR) program and includes the findings of the stakeholder consultations undertaken by the City in accordance with Provincial requirements.
Background Information
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103448.pdf
Attachment 1 - Summary of Vacant Commercial and Industrial Property Information from 2001 to 2015
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103633.pdf
Attachment 2: Copies of written submissions received: a. Railway Association of Canada, dated March 22, 2017; b.Toronto Industry Network, dated April 4, 2017; and c. Toronto Real Estate Industry Coalition, dated May 2, 2017
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103634.pdf
Attachment 3 - Summary of Stakeholder Consultations
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103635.pdf
Attachment 4 - Summary of Survey Results
https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-103636.pdf