By Diana Kuhnberg
Centretown residents may see significant cuts to municipal services and property tax increases in the coming year, according to a city councillor and a local MP.
With the sale of the of the Thomas D’Arcy McGee Building on Sparks Street and the Skyline Complex on Merivale Road, two government office buildings, the city could lose $4 million in grants in lieu of taxes from the federal government.
“It means more pressure on the budget this year,” says Somerset Coun. Diane Holmes.
She says in addition to the $4 million, the city must find another $80 million to maintain its current level of municipal services.
“This is more of a trick than a treat for residents,” Ottawa Centre MP Paul Dewar says of the deal, slated to be finalized Oct. 31.
He is working to bring the issue to the attention of Public Works Minister Michael Fortier, Prime Minister Stephen Harper and other local MPs.
“It’s a bad deal,” Dewar says. “An increase in taxes will be directly related to the sale of the buildings.”
In addition to the two buildings sold, along with five others across Canada, the federal government, which no longer wants to pay to maintain the buildings, is considering putting up 23 other Ottawa properties, which may result in the loss of a further $25 million in revenue for the city.
Holmes says she doesn’t know if the government considered the financial hit the city may take as a result.
“The government did not do their homework on this,” Dewar says.
Holmes says Ottawa should meet regularly with the federal government to ensure the feds are “doing their fair share.”
She says the city negotiated in lieu payments, since the federal government is constitutionally exempt from paying property taxes.
According to Holmes, when the private sector takes control of the properties, it will pay property taxes, but the education portion of the tax will go to the province.
Because the previous deal with the federal government didn’t take the province into account, it hadn’t been an issue.
Further negotiations with the province could be necessary to try to direct lost funds back to the city.
Adam Taylor, research director for the Canadian Federation of Taxpayers, says property values have been frozen since 2005.
However, when the land is next reassessed, the city could gain more in taxes if the value has increased.
The Public Service Alliance of Canada (PSAC), which has opposed the plans since the former Liberal government began considering the sales, says taxpayers are getting a bad deal.
“These are collectively held assets,” says Patty Ducharme, national executive vice-president for PSAC.
“These are buildings that through taxes, you’ve paid for, I’ve paid for, my parents have paid for.”
PSAC has met with Bloc Quebecois, NDP and Liberal MPs and written letters to convince the Conservatives to rethink their strategy.
While PSAC isn’t working directly with the city, each has similar goals.
“We’re both trying to convince the government for different reasons,” Ducharme says.
“We’re putting our eggs in a shared basket.”
Dewar, on the other hand, watches municipal affairs closely.
“I pay close attention. Ottawa as the capital is directly affected by the federal government.”
Ducharme, who sees the sales as corporate gifts, also says it’s not right that the federal government is so guarded about the deals.
“Everything has been done in a cloak of secrecy,” she says. “Apparently, they don’t want to be accountable.”
Holmes says the task of balancing the budget is an “impossible job.”
She expects cuts to be made in the usual areas, such as library services, community centre hours and landscaping.
Centretown residents can have their say in public consultations, held throughout the city, after the budget is released later this month.