Item - 2018.EX31.1

City Council on February 12, 2018, adopted the following:

1.  Subject to receiving the necessary regulation to provide authority for the 2018 taxation year, in calculating the tax ratios, City Council elect the following in order to determine the notional tax rates to raise the previous year's levies:

a.  to exclude the assessment of a property in a property class from the calculation of the total assessment of the properties in that property class if the current value of the property has increased by 100 percent or more or decreased by 25 percent or more, in accordance with subsection 2.2(4), paragraph 2 of Ontario Regulation 121/07 ("O.Reg. 121/07"); and

b.  to adjust the total assessment for property in a property class so that the assessment excludes changes to the tax roll for the previous year resulting from eligible assessment-related losses from prior years, in accordance with an election under subsection 19 (4) of O. Reg. 121/07 to make subsections 19 (4.2), (4.3) and (4.4) apply.

2.  City Council adopt the 2018 tax ratios shown in Column II for each of the property classes set out below in Column I:

3.  Subject to receiving the necessary amendment to O.Reg. 121/07 for the 2018 taxation year, City Council elect to raise the tax rates on the restricted property classes as follows:

a.  on the Commercial Property Classes, by one-half of the percentage tax rate increase on the unrestricted property classes (residential, new multi-residential, pipelines, farmlands, and managed forests);

b.  on the Industrial Property Classes, by one-third of the percentage tax rate increase on the unrestricted property classes (residential, new multi-residential, pipelines, farmlands, and managed forests); and

c.  on the Multi-Residential Property Classes, no tax rate increase.

4.  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 2018 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:

5.  City Council approve the elimination of the Vacant Commercial and Industrial Tax Rebate Program effective July 1, 2018.

6.  City Council adopt: 

a.  the tax rates set out below in Column V, which rates will raise a local municipal general tax levy for 2018 of $4,230,920,439 inclusive of a 2.1 percent residential, new multi-residential, pipeline, farmlands and managed forest tax rate increase, a 1.05 percent commercial tax rate increase, and a 0.70 percent industrial tax rate increase; and

b.  the additional tax rates set out below in Column VI, which rates will raise an additional special general tax levy of $14,632,835 dedicated for priority transit and housing capital projects (the "City's Building Fund levy"), in accordance with Part 6 of Item EX22.2 adopted by City Council on February 15 and 16, 2017:

7. Subject to the required regulation being enacted by the Province, City Council adopt the Creative Co-Location Facilities subclasses, or other name defined in regulation, within each of the Commercial Residual Property class and Industrial Property class for the 2018 taxation year.

8.  Subject to receiving the necessary regulation, City Council adopt:

a.  the tax rate for municipal purposes for the Creative Co-location Facility subclass (or such other name as may be made in the regulation) of the Commercial Residual Property class be set at a 50 percent reduction of the Commercial Residual Property class tax rate; and

b.  the tax rate for municipal purposes for the Creative Co-location Facility subclass (or such other name as may be made in the regulation) of the Industrial Property class be set at a 50 percent reduction of the Industrial Property class tax rate.

9.  City Council determine that the 2018 Non-Program Tax Account for Rebates to Charities in the Commercial class be set in the amount of $5,502,286 to fund the mandatory 2018 property tax rebates to registered charities in the commercial property classes, which provision is to be funded, for a net impact on the 2018 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 $5,502,286 to fund the total estimated rebates to registered charities for properties in the commercial classes in 2018.

10.  City Council direct that the final Industrial Property Class tax rate be reduced by subtracting 0.0115724 percent from the final tax rate, in order to reduce the municipal taxes on the industrial tax class by $943,000 - being one half of the estimated municipal portion of industrial taxes to be rebated under the vacant unit rebate program for 2017, as directed by City Council at its meeting on May 24, 2017, and the Budget Committee 2018 recommended Operating Budget for the Vacancy Rebate Program be reduced by the same amount.

11.  City Council amend its decision of March 10, 2015 to amend the City's tax increase cancellation program, so that the program will automatically adjust the eligible household income by the City of Toronto's rate of inflation, by clarifying 'Toronto's rate of inflation' to be 'Statistics Canada, All-items Consumer Price Index by City, Annual Change - Toronto', and City Council amend Municipal Code Chapter 767, Taxation, Property Taxation, to give effect to an automatic annual increase.

12.  City Council direct the Interim Chief Financial Officer to report to the Executive Committee at its meeting scheduled for April 17, 2018, or directly to Council or a special meeting of City Council if necessary, on the 2018 tax rates for school purposes, and the 2018 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 2018 'clawback' rates).

13.  City Council determine that:

a.  the instalment dates for the 2018 final tax bills be set as follows:

i.  the regular instalment dates be July 3, August 1, and September 4 of 2018;

ii.  for taxpayers who are enrolled in the monthly pre-authorized property tax payment program, the instalment dates be July 16, August 15, September 17, October 15, November 15 and December 17 of 2018; and

iii.  for taxpayers who are enrolled in the two installment program, the final instalment date be July 3, 2018; and

b.  the collection of taxes for 2018, other than those levied under By-law 1380-2017 (the interim levy by-law) be authorized.

14. City Council approve the Detailed Eligibility Criteria outlined in Attachment 1 to the report (February 2, 2018) from the General Manager, Economic Development and Culture in order to assess eligibility of properties for inclusion in the Creative Co-Location Facilities Property subclasses, with the Detailed Eligibility Criteria amended by: 

a. adding the words "or notwithstanding b), houses more than 40 separate tenants that meet the definition of 'Creative Enterprises'" in Step 1, Part a) so that Part a) now reads as follows:

a) Minimum Scale/Physical Space: The property must consist of a physical building (i.e. not a virtual network), with a minimum net rentable area of 10,000 square feet, or a minimum net rentable area of 5,000 square feet, where the property is owned by the City of Toronto or notwithstanding b), houses more than 40 separate tenants that meet the definition of "Creative Enterprises";

b. deleting the number "ten (10)" and replacing it with the number "five (5)" in Step 1, Part b) so that Part b) now reads as follows:

b) Multiple Tenants: The property must have a minimum of five (5) distinct, full-time tenants that meet the definition of "Creative Enterprises".

c. adding the words "or the landlord can demonstrate continuous occupancy by the Creative Enterprise for a minimum of five years up to the point of application" to Step 2, Part b) so that Part b) now reads as follows:

b) The term of the lease for the leased space occupied by the Creative Enterprise is a minimum of five years, or the landlord can demonstrate continuous occupancy by the Creative Enterprise for a minimum of five years up to the point of application; and

d. adding the words "or by groups of tenants as enabled by the landlord" to Step 2, Part d) so that Part d) now reads as follows:

d) All Creative Enterprises leasing space in the Qualifying Property receive at least two of the following benefits that arise from co-location (provided by or through the property owner or landlord, or by groups of tenants as enabled by the landlord).

15. City Council approve the process to approve properties for inclusion in the new Creative Co-Location Facilities Property  subclasses, and a further review process, as outlined in Attachment 2 to the report (February 2, 2018) from the General Manager, Economic Development and Culture.

16. City Council authorize the General Manager, Economic Development and Culture to assess and annually designate those properties that meet the eligibility criteria set out in Attachment 1 to the report (February 2, 2018) from the General Manager, Economic Development and Culture as amended by Part 14 above, for inclusion in the Creative Co-Location Facilities Property subclasses, and to amend the eligible properties from time to time as properties become ineligible due to tenancy changes, or other changes affecting eligibility.

17. City Council direct the General Manager, Economic Development and Culture to report to the Economic Development Committee on:

a.  the impact of Creative Co-Location Facilities Property subclasses and the status of its administrative process within twelve months of the provincial regulation coming into force; and

b. the implementation and impacts of the Creative Co-Location sub-class in 2019.

18. City Council authorize the City Solicitor to submit the bills necessary to give effect to City Council's decision, including the authority to submit bills from time to time to give effect to the General Manager, Economic Development and Culture's designation of eligible properties for inclusion in the Creative Co-Location Facilities Property subclasses.