September 30, 2020
WELLINGTON COUNTY AND TOP AGGREGRATE PRODUCING MUNICIPALITIES CALL FOR FAIR APPROACH TO MPAC PROPERTY VALUATIONWritten by Mayor James Seeley
On Tuesday, August 18, I, along with Warden Kelly Linton and members of the Top Aggregate Producing Municipalities of Ontario (TAPMO), virtually met with Parliamentary Assistant to the Minister of Finance, Stan Cho, to present options for an equitable approach to property tax assessment, so that aggregate properties (gravel pits and quarries) can be taxed fairly.
The Municipal Property Assessment Corporation’s (MPAC) current property tax valuation methodology unfairly sees active gravel pits incurring less property tax than single family homes and small businesses because the methodology sets an artificial cap on their property valuations – costing areas like the County of Wellington millions in annual tax revenue.
This tax revenue is needed now more than ever so municipalities can continue to provide high-quality services and programmes which support our residents and businesses in the fight against COVID-19.
The meeting was held during the virtual Association of Municipalities of Ontario (AMO) conference, where municipal and provincial policymakers come together to discuss important issues facing local and provincial government. We had a very positive conversation with Parliamentary Assistant Stan Cho about how the current MPAC system is forcing homeowners and businesses to pay more. We presented several policy-driven, equitable solutions. MPAC can enable gravel pits to pay their fair share so that they can continue to support municipalities during a time a time when we need their help the most.
One proposed solution is for the Ministry of Finance to create a separate property class for these aggregate producing properties, as it did in 2015 for landfills which enabled municipalities to maintain stability in local taxation levels and meet the needs of their communities. Other recommendations include the Ministry of Finance issuing a directive to MPAC for how to assess these types of properties based on their true industrial or market value, using the same land values as comparable properties in the area, or removing the exemption of aggregate in the Assessment Act that limits the ability of MPAC to assess the full value of the property.
MPAC’s current property tax valuation structure unfairly sees active gravel pits incurring less property tax than single family homes and small businesses. It also leads to properties that are located in the same areas and are similar to gravel pits receive vastly different property valuations, which contradicts the principle of fairness and transparency underpinning our taxation system that similar properties should be treated and taxed equally. Classifying gravel pits as the lowest forms of farmland sets an artificial cap on these producers’ valuations and keeps their property taxes well below what they should be paying. It is the residents and businesses are subsidizing the break that gravel producers are getting. Ontario municipalities are therefore eager to find a solution that is fair for all involved: the municipality, taxpayers, and aggregate producers.
I look forward to continuing this important dialogue with the Government of Ontario and I will continue to work hard with my TAPMO counterparts to develop a fair and sustainable plan for aggregate extraction.