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Presentation to the Finance Minister's Pre-budget Consultations

January 21, 2008

Good morning. My name is Bob Topp and I'm Chairman of CAPTR, the Coalition After Property Tax Reform. CAPTR is an alliance of urban and waterfront coalitions and two major seniors' organizations and represents over one million Ontario property owners.

Our primary concern is with the use of pure assessment as a basis for distributing property taxes. The reliance on volatile real estate markets, combined with imprecise valuation methods, results, with each new assessment, in major and unpredictable taxation shifts from one neighbourhood to another and from one property to another.

It can create financial hardship for long term homeowners at all income levels, seniors in particular, whose properties happen to be located in hot urban and waterfront market areas. What is hugely unfair is to find your tax bill escalating, without selling your home, without any additional income and without any additional services.

The government in its 2007 budget introduced a four year assessment cycle and phase-in of increases. While this will cushion the shock of a major increase, it does not, in our view, begin to deal with the volatility inherent in the CVA-based system. In fact less frequent assessment means more volatility. If real estate prices decline, as many expect, Ontarians will be stuck with high and distorted valuations for the next four years.

CAPTR has commissioned a study in an effort to predict from an analysis of real estate markets from 2005 to 2007, the range of assessment increases which will be faced in 2008 by Ontario property owners. We will present that analysis to the Finance Minister in an effort to convince the government that further stabilization is needed NOW to protect property owners from major and unpredictable assessment related tax increases in 2009. We continue to recommend a limit be placed on assessment increases so that home owners can forecast their property tax obligations over the long term. Without that stabilization, there will be a huge outcry this fall when homeowners receive their assessment notices.

In conclusion, CAPTR will continue to push for an equitable property tax regime in Ontario. We believe the situation is urgent. We will continue to make every effort to bring greater stability to the system on behalf of our coalition members and all Ontario homeowners. Given that Ontario has among the highest property taxes in the Western world, a fair system for distributing the tax load is essential.

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