By Kelly Almond
A recent scathing report by the provincial ombudsman on Ontario’s property assessment system doesn’t go far enough, says Capital Ward Coun. Clive Doucet.
“It’s not going to help us solve the fundamental problem,” which he says is a flawed market value system.
After receiving complaints from taxpayers and municipal councils across the province, the ombudsman initiated a review of the province’s Municipal Property Assessment Corporation (MPAC) last October.
MPAC, which is legislated by the province to manage property assessment in Ontario, was criticized for withholding information on how it calculated its assessments. “MPAC operates with . . . a habit of secrecy that is too deep to enable public trust,” says Ontario Ombudsman André Marin in his report.
Marin presented 22 recommendations in his final report, titled “Getting it Right.” The suggestions primarily address the transparency and fairness of MPAC. Both the Ontario Ministry of Finance and MPAC pledged to implement 18 of them immediately and to consider the remaining four.
However, many people feel that the report is only a small step towards fixing Ontario’s property assessment system.
“It’s not going to help much at all,” says Doucet. He says Marin’s recommendations don’t address the unfairness of the assessment system, which he says is essentially that only some people wind up paying for the increased costs of the city.
Bay Ward Coun. Alex Cullen is a member of the provincial NDP’s Task Force on Assessment and Property Tax Issues. The task force has been touring the province since November, getting public feedback and suggestions on how to improve the assessment system.
“Taxpayers in Ottawa know that the province’s assessment system is capricious, broken and unjust,” he said in a media release.
At a public hearing in Nepean last month, Cullen praised Marin’s report, but outlined the larger issues surrounding Ontario’s property assessment system. He says there are two major problems that need to be addressed to ensure a fairer and more transparent system.
The first problem is that property tax dollars, which are only supposed to support municipal services, are being used to fund many services previously paid for by the province. Cullen says because of this downloading, Ontario has the highest per capita property taxes.
The second issue, he says, is a disconnect between market value of a home and what property owners actually pay in taxes. This means that a home on the outskirts of a city could be assessed at a much lower value than the exact same house located in the city centre.
Areas like Centretown have been hardest hit in the past few years, with skyrocketing assessments that may not reflect the actual market value of homes.
“Where I’ve noticed the problems are in older neighbourhoods (like Centretown),”says Don McCallum, an assessor with Affiliated Real Estate Group.
Doucet says this is because houses in older neighbourhoods are not being built anymore, but many people still want to live closer to the heart of the city. “People are less and less enchanted with the sprawl,” he says.
MPAC currently uses a mathematical system to assess market value, with more than 70 variables to calculate property assessment. These include age of the home, lot size, number of garages and geographical location — but an assessor never actually visits the home.
Doucet is part of the Capital Ward Council, which recently released a tax assessment study and proposal for an indexed market price system. Essentially, with this plan, the selling price of property would become the base amount for an assessment and the value would rise by the rate of inflation each year.
McCallum thinks such a system would be more equitable. “I think it makes eminent sense,” he says, as it would express market value as dictated by the local area instead of unrelated variables.