We’ve reached that dreaded time of year when homeowners are slapped with property tax hikes. It’s hitting particularly hard in this economy when many Canadians are struggling to make ends meet.
Post-pandemic, with communities across the country battling high interest rates and disintegrating infrastructure while seeking to improve services and offset the financial deficits of recent years, soaring property tax increases way beyond the inflation rate are being seen Canada-wide.
Is this necessary? Or are homeowners being bled dry?
Changing Canadian city centre landscapes thanks to eroding affordability and shifting migration
According to a recent analysis by Re/Max Canada, although land transfer taxes and higher property tax assessments in key markets “appear to have little effect on the surface,” the reality is that they’re eroding affordability levels and slowly shifting migration patterns, changing the landscape in Canadian city centres.
Examining six of the country’s leading housing markets — Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax — Re/Max’s Taxes & Canadian Real Estate report notes that “governments at all levels are collecting billions” through levies and development fees on new construction and land transfer and property taxes on residential properties.
Tax rate increases, along with record-high housing values and mortgage rates, are sparking “a post-pandemic exodus from the country’s most expensive markets,” the report maintains.
“For many, the dream of home ownership is fading,” says Re/Max Canada president Christopher Alexander.
Affordability and opportunity are keys to a healthy market and economy, Alexander asserts. “The goal should be to make homeownership more affordable, not less … Clearly, public policy is contributing to a myriad of issues, with affordability front and centre. And there’s no relief in sight.”
“You can’t tax your way to affordability”
Alexander says that government over-reliance on the housing sector as a means of funding is making access to housing increasingly problematic. “New and proposed property tax assessments are creating confusion in markets across the country.”
As Tim Hudak, CEO of the Ontario Real Estate Association bluntly puts it: “You can’t tax your way to affordability.”
Nearly 40% property tax increase proposed in Osoyoos, B.C.
Count yourself lucky you don’t live in Osoyoos, on the southernmost fringe of British Columbia’s Okanagan Valley. Residents of this scenic little town — nearly half of whom are seniors — were shocked to learn that an astronomical property tax leap of almost 40 per cent was slated to be adopted this year, largely due to the need for upgrading aging and foul-smelling sewer and water infrastructure, to the tune of over $60 million over the next five years.
There was a huge outcry from the town, with many people questioning why the hike couldn’t at least be spread out over several years. Mayor Sue McKortoff warned that that would just delay increases down the road. But as she explained to REM, council rescinded the unpopular budget and “agreed to conduct a review” in a special meeting. The revised final increase hasn’t yet been officially announced.
Come of that what may, there’s no getting around the fact that the community’s trust in its governance has eroded.
Significant hikes throughout the country
To varying degrees, this is a widespread issue.
In Halifax, property tax assessments this year have jumped by more than 20 per cent, prompting a hike to tax bills of almost 6 per cent. This “adds to the already significant number of hurdles for first-time buyers,” leaving residents wondering when something will be done, reports local Re/Max broker Ryan Hartlen. He believes a good place to start would be incentivizing first-time buyers through property tax subsidies.
In Montreal, reassessments are higher than recent sales prices in some cases. The almost 5 per cent property tax increase (the biggest chunk of which is for public security, mainly police) is the city’s highest jump in 13 years. Montreal’s mayor has stated that Canadian cities are facing “unprecedented challenges” around inflation, housing and climate change.
Meanwhile, both Vancouver (up by 7.5 per cent) and Calgary (up 7.8 per cent) are seeing significant property tax markups this year as well. And although Winnipeg’s 3.5 per cent rise is more modest, the city has raised and added fees for other services.
Toronto sees historic 9.5% jump in property taxes — “one of the worst types” of levies
Torontonians are facing a whopping 9.5 per cent property tax jump, reportedly needed to shore up services, combat a $1.8 billion budget deficit and help get the city “back on track,” according to Toronto mayor Olivia Chow.
City councillor Brad Bradford is among those opposed.
Yes, there will now be “hundreds of millions in new spending,” Bradford acknowledges, but it comes at a time when homeowners can least afford it.
“I’ve heard loud and clear from many in my community that they think this historic tax hike is too much … Deciding to spend money is the easy part of budgeting. It’s finding savings that requires hard work.”
Bradford recommends that those looking to buy or sell property make sure they’re factoring in the cost of the tax hike.
On the plus side, the Ontario provincial government has agreed to bail the city out of some significant capital costs, including those for two major Toronto highways (the Gardiner Expressway and Don Valley Parkway).
The city and other levels of government will need to continue to explore new, efficient measures to raise revenue besides property tax, states Toronto-based Re/Max Realtron general manager Cameron Forbes. He notes that examples could include road tolls and taxes on gasoline and parking.
“Property tax is one of the worst types” of levy in his opinion, as it’s a regressive tax applied uniformly regardless of income.
Not easy: Fort St. John, B.C. worked hard to raise taxes by less than 5%
British Columbia realtor Trevor Bolin, former leader of B.C.’s Conservative Party, is well versed in budgets, having sat on the local city council of his hometown of Fort St. John for the past 16 years.
“If you can imagine what your home and personal costs have looked like the past year — forced up due to skyrocketing costs — now imagine providing those same services to swimming pools, hockey rinks, city-wide fleets of vehicles, staffing wage increases, etc.,” Bolin says. “That’s what’s happening with your property taxes right now.”
He explains that the Fort St. John council worked hard to ensure a less than 5 per cent increase this year, which wasn’t easy. He adds, “Sadly, as municipalities continue to cover expenses for provincial and federal governments, you’ll have a tax increase next year as well.”
Lastly, “I can tell you that politicians really don’t like being sworn at while grocery shopping,” he advises, laughing.
Susan Doran is a Toronto-based freelance writer who has been contributing to REM since its very first issue.
I think and my take on it is, its compounding. Meaning its another expense on top of all the others like high food costs, high interest rates, and its over whelming now, and maybe the breaking point for many.
All levels of government need to cut back their spending, period. Too much waste and flagrant disregard of the individial taxpayer.
The public also needs to let go of their unrealistic expectations of “government”.
We are very spoilt in Canada. It seems to me they spend like there is an umlimited supply of $$$$.
CUT BACK and put the money into essential and necessary areas only.
Come on enough is enough. This better stop before we see civil unrest. Who ever thought if you beautified your property you would be reassessed with a tax increase. Why? It’s your damn property right ? You have a contract from the crown clearly states to all your heirs and assigns forever. No where in that crown contract does the crown reserve the right to taxation of your real estate. Let’s face it over taxation is the direct result of government misspending. The federal government sits at the top syphoning gas taxes, booze tax, cannabis tax, gambling tax, income tax, land transfer tax, property tax, estate tax, sales tax, etc etc. but yet we are still in a deficit. Where does it end ? It ends only when Canadians stand up and say we have had enough ! Doesn’t really matter the number of new ways they manipulate from the common man’s wallet, government over spends exorbitantly and will continue until Canadians say no more ! The federal government forgets or ignores the wealth is fuelled by Canadians. Their job is to look after Canada and Canadians first. It is not the responsibility of government to hand over hard earned Canadian tax dollars to every global bleeding heart. Our government and our federal leaders must be reminded Canadians and Canada comes first. I as a canadian am sick to death of hearing our government has handed over millions and billions to other countries. All this as I watch tent cities becoming common place, our health care crumbling, Canadians dying in emergency rooms, our infrastructure so antiquated it’s incapable of handling waste, with more and more raw sewage releases being let go into our lakes and rivers. What kind of government stands by watching the system crumble from over burden but yet continues to slap itself on the back from the so called benefit of millions and millions of immigrants let into this country of which we have no infrastructure for. Have we completely lost our political minds and ignored the direct threat to Canadian society and the environment.
Our governments have become glutens of built bureaucracy corrupted and unaccountable financially, Federally, Provincially, and municipally all are guilty. We have a news bulletin for those politicians who will listen Canadians are sick and tired of being robbed and lied to!
We must stop over taxing the Canadian people and financially put our house back in order.
We are at the crossroads of collapse.
I totally agree with you….when and how can we make it stop
People feel entitled. When will they realize that government gets $$ from working people? Somebody has to work to make money people insist they should have for free!!
Agreed. People strike for wage increases but forget that every time their paycheque increases, the cost of goods or services they provide also needs to increase to support the increase on their paycheque.
You can’t have it both ways. Wake up and see reality for what is is.
I have to agree with all the comments so far.
“Montreal’s mayor has stated that Canadian cities are facing “unprecedented challenges” around inflation, housing and climate change.” Nowhere in the reasons do we ever see governmental overspending – never.
Montreal’s mayor mentions inflation, housing and climate change. Well, our current inflation is largely fuelled by huge governmental overspending, much of it federal.
Housing is also an issue because of said inflation, but also because of governmental red tape in a country with more real estate per person than almost any other country making building more expensive and slow.
Climate is another issue that government is irresponsible on. I spent a solid year studying climate. The evidence is clear, and there for anyone who researches. Of course we should mitigate our emissions, but there is NO emergency. The Intergovernmental Panel on Climate Change (IPCC) has removed their worst case scenario from the books because they have determined it will not occur, and the second worst scenario is also now being questioned. Their realistic scenarios are all manageable with reasonable mitigation efforts. Western nations’ emissions have been in decline for a couple decades. Yet, our federal government is full steam ahead determined to destroy our economy (read higher taxes) for the climate gods.
Kudos to councillor Bradford for being one of the lonely dissenting voices.
Trudeau/Singh Coalition sickness of spend spend spend and have no worries of how the tax payers will pay for it……oh yeah, the Rich Land Owner, the people who sweat and toil at their jobs at $20 a hour or $1,000,00 a year depending on where you live in this great country. Trying to buy a home in the major cities is so incredibly costly, and then for the city governments to spend “OUR” money on ridiculous “look at our city” items. Prop up their multiple staff that enjoy the “game of making it difficult for the tax payer” . HAHAHA They are rich land owners, they can pay for it, pay for this, pay for that…….like useless bike lanes in a city where pedestrians and cars rule and the unfortunate store owner sees valuable parking spots disappear in front of their store, while they are heavily taxed on land/services/licensing/bylaws/signage etc. Good bye to some of their customers and desperate income needed to pay for the city services they are heavily burdened by.
Its unfortunate that Singh/Trudeau and provincial leaders don’t have to balance budgets like the Cities do, there might be alot more common sense in the spending then. Its a disease, that needs a vaccine………ELECTION?? Hopefully more people VOTE than got a vaccine. Things can change. VOTING is healthy, wise, safe, and can bring some great ideas and solutions, although there is no perfect leader.
Maybe TAX the non-voter? Someone’s GOT to be better than the leaders we currently have that spend so freely. Tax the leaders who over spend. Common tax payers that can over see the budgets and can say NO NO NO! Go back and figure this out……City Tax payers are not paying for free drugs, get the province or Canada to build more detox centres, get people off drugs and back into a community where they work, contribute, take part in families lives instead of stealing for the habits and causing destruction and not being jailed until they are drug free and less likely to re offend.
Leave my food, my home/shelter, my water, my business, my car, my fuel, my income alone.
agree
I don’t get how so many people are so narrow-minded!
You actually think you can go on strike or ask for more money on your paycheque but don’t think that affects everything and everybody around you?
Every time more goes on to your paycheque, the cost of goods or services to all will also increase to support the extra on your paycheque.
You can’t have it both ways. Wake up and see reality for what it is.
The more you make, the more the things you need will cost.
You are the cause and the reason everything goes up.
Yes politicians have no accountability. AND that needs to change. They spend your our money as they wish.
The people that work for the towns and cities, like you also want more on their paycheque to afford the cost of the goods or services your company supplies. Those items went up in price because YOU wanted more on your paycheque.
Vicious cycle….. remember!
It doesn’t mater how much you make. The more you make the more everything will cost. You are the reason why everything costs more! Including property tax.