2020 Property Tax Rates and Related Matters

to adjust the total assessment for property in a property class so that the assessment excludes changes to the tax roll for the previous year resulting from eligible assessment-related losses from prior years, in accordance with an election under subsection 19 (4) of Ontario Regulation 121/07 to make subsections 19 (4.2), (4.3) and (4.4) apply. 2. City Council adopt the 2020 tax ratios shown in Column II for each of the property classes set out below in Column I: Column I Column II (to be adopted) Column III (for information only) Property Class 2020 Recommended Tax Ratios (before Graduated Tax Rates) 2020 Ending Ratios (after Graduated Tax Rates and Levy Increases) Residential 1.000000 1.000000 Multi-Residential 2.178843 2.105163 New Multi-Residential 1.000000 1.000000 Commercial General 2.700000 2.654348 Residual Commercial -Band 1 2.619000 2.432193 Residual Commercial -Band 2 2.619000 2.654348 Industrial 2.683811 2.623306 Pipeline 1.923563 1.923563 Farmlands 0.250000 0.250000 Managed Forests 0.250000 0.250000 3. Subject to receiving the necessary amendment to Ontario Regulation 121/07 for the 2020 taxation year, City Council elect to raise the tax rates on the restricted property classes as follows: i. on the Commercial Property Classes, by one-half of the percentage tax rate increase on the unrestricted property classes (residential, new multi-residential, pipelines, farmlands, and managed forests); ii. on the Industrial Property Classes, by one-third of the percentage tax rate increase on the unrestricted property classes (residential, new multi-residential, pipelines, farmlands, and managed forests); and iii. on the Multi-Residential Property Classes, no tax increase. 4. City Council continue the previous adoption of two bands of assessment of property in the Residual Commercial Property Class, for the purposes of facilitating graduated tax rates for the Residual Commercial property class in 2020 as set out in the Enhancing Toronto's Business Climate initiative, and setting such bands of assessment for each band shown in Column II at the amount shown in Column III, and setting the ratio of the tax rates for each band in relation to each other at the ratio shown in Column IV: Column I Column II Column III Column IV Property Class Bands Portion of Assessment Ratio of Tax Rate to Each Other Residual Commercial Lowest Band 1 Less than or equal to $1,000,000 0.916305 Residual Commercial Highest Band 2 Greater than $1,000,000 1.000000 5. City Council adopt: a. the tax rates set out below in Column V, which rates will raise a local municipal general tax levy for 2020 of $4,509,055,431 inclusive of a 2.0 percent residential, new multi-residential, pipeline, farmlands and managed forest tax rate increase, a 1.0 percent commercial tax rate increase, and a 0.66 percent industrial tax rate increase; and b. the additional tax rates set out below in Column VI, which rates will raise an additional special general tax levy of $47,573,413 dedicated for priority transit and housing capital projects (the "City's Building Fund levy"), in accordance Part 6 of City Council's decision on Item 2017.EX.22.2 headed 2017 Capital and Operating Budgets and Item EX11.26 headed "City Building Fund": Column I Column II Column III Column IV Column V Column VI Column VII Property Class 2020 Tax Rate for General Local Municipal Levy before Graduated Tax Rates 2020 Tax Rate for General Local Municipal Levy After Graduated Tax Rates 2020 Additional Tax Rate to Fund Budgetary Levy Increase 2020 Municipal Tax Rate 2020 Additional Tax Rate to Fund City Building 2020 Municipal Tax Rate Inclusive of City Building Fund Rate (excluding Charity rebates) (excluding Charity rebates) (Column III+IV) (Column V+VI) Residential 0.431598 percent 0.431598 percent 0.008632 percent 0.440230 percent 0.006474 percent 0.446704 percent Multi-Residential 0.940384 percent 0.940384 percent 0.000000 percent 0.940384 percent 0.000000 percent 0.940384 percent New Multi-Residential 0.431598 percent 0.431598 percent 0.008632 percent 0.440230 percent 0.006474 percent 0.446704 percent Commercial General 1.165314 percent 1.165314 percent 0.011653 percent 1.176967 percent 0.008740 percent 1.185707 percent Residual Commercial - Band 1 1.130354 percent 1.067783 percent 0.010678 percent 1.078461 percent 0.008008 percent 1.086469 percent Residual Commercial - Band 2 1.130354 percent 1.165314 percent 0.011653 percent 1.176967 percent 0.008740 percent 1.185707 percent Industrial 1.158327 percent 1.158327 percent 0.007722 percent 1.166049 percent 0.005792 percent 1.171841 percent Pipelines 0.830205 percent 0.830205 percent 0.016604 percent 0.846809 percent 0.012453 percent 0.859262 percent Farmlands 0.107899 percent 0.107899 percent 0.002158 percent 0.110057 percent 0.001618 percent 0.111675 percent Managed Forests 0.107899 percent 0.107899 percent 0.002158 percent 0.110057 percent 0.001618 percent 0.111675 percent 6. City Council determine that the 2020 Non-Program Tax Account for Rebates to Charities in the Commercial and Industrial Property Classes be set in the amount of $7,732,710 to fund the mandatory 2020 property tax rebates to registered charities in the commercial and industrial property classes, which provision is to be funded, for a net impact on the 2020 operating budget of zero, by the following: a. the additional tax rates set out below in Column III be levied as part of the general local municipal levy on the commercial classes set out in Column I and Column II to raise a further additional local municipal tax levy of $7,573,960 to fund the total estimated rebates to registered charities for properties in the commercial classes in 2020; and Column I Column II Column III Commercial Property Classes Bands Additional Tax Rate to Fund Rebates to Eligible Charities Commercial General Unbanded 0.006102 percent Residual Commercial Lowest Band 0.005591 percent Residual Commercial Highest Band 0.006102 percent b. an additional tax rate of 0.001825 percent be levied as part of the general local municipal levy on the industrial class to raise a further additional local municipal tax levy of $158,750 to fund the total estimated rebates to registered charities for properties in the industrial class in 2020. 7. City Council allocate $878,700, equivalent to 15 percent of all incremental municipal tax revenue arising from commercial and residential assessment growth in the Tax Increment Financing Zones for 2019, net of any Imagination, Manufacturing, Innovation and Technology Grants attributable to this assessment growth, to the SmartTrack Funding Reserve Fund XR173, in accordance with Part 19.e. of City Council's decision on Item 2018.EX33.1 headed Implementation of the SmartTrack Stations Program and the Metrolinx Regional Express Rail Program. 8. City Council direct the Chief Financial Officer and Treasurer to report in April to the Executive Committee, or directly to City Council or a special meeting of City Council if necessary, on the 2020 tax rates for school purposes, and the 2020 percentage of the tax decreases required to recover the revenues foregone as a result of the cap limit on properties in the commercial, industrial and multi-residential property classes (the 2020 'clawback' rates). 9. City Council determine that: a. the instalment dates for the 2020 final tax bills be set as follows: i. the regular instalment dates be July 2, August 4, and September 1 of 2020; ii. for taxpayers who are enrolled in the monthly pre-authorized property tax payment program, the instalment dates be July 15, August 17, September 15, October 15, November 16 and December 15 of 2020; and iii. for taxpayers who are enrolled in the two installment program, the final instalment date be July 2, 2020; and b. the collection of taxes for 2020, other than those levied under By-law 1673-2019 (the interim levy by-law) be authorized. 10. City Council adopt the application of the Creative Co-location Facilities subclasses for the Commercial, Commercial Residual and Industrial property classes for 2020, and: a. the tax rate for municipal purposes for the Creative Co-location Facility subclass of the Commercial and Commercial Residual Property classes be set at a 50 percent reduction of the Commercial and Commercial Residual Property class tax rate for 2020; and b. the tax rate for municipal purposes for the Creative Co-location Facility subclass of the Industrial Property class be set at a 50 percent reduction of the Industrial Property class tax rate for 2020. 11. City Council adopt the following property tax capping policies for the 2020 taxation year: a. limit tax increases for the commercial, industrial, and multi-residential property classes by capping taxes at 10 percent of the preceding year's annualized taxes, by opting to have subsection 292(1), paragraph 1, of the City of Toronto Act, 2006, apply for the 2020 taxation year; b. continue to provide that the 10 percent cap on tax increases apply to any property within the commercial, industrial and multi-residential classes, regardless of whether the property had reached full Current Value Assessment taxation levels in a prior year, subject to the threshold adopted in Part 11.c. below; and c. for the purposes of subsection 292(1), paragraphs 3 and 4 of the City of Toronto Act, 2006, adopt a threshold limit of $500 to determine the taxes for municipal and school purposes, such that properties that are within $500 (plus or minus) of their full Current Value Assessment level of taxation in the current year are taxed at full Current Value Assessment taxation levels for the year, and are therefore excluded from capping/claw-back provisions for that year. 12. City Council direct the City Manager to convene an MPAC Response Working Group with Financial Planning Staff and industry experts to assess and report to the Executive Committee in the second quarter of 2020 on the next phase of surging assessments anticipated from the Municipal Property Assessment Corporation, such report to include consultation with Councillors with high-density zones. 13. City Council request the Chief Financial Officer and Treasurer to request the Province of Ontario to review the "ranges of fairness" for tax ratios and regulations that tax ratios for commercial, industrial and multi-residential properties can only stay the same or be reduced but cannot be increased. 14. City Council request the Chief Financial Officer and Treasurer to report before the 2021 Budget process on the status of the ratios between property classes and progress made towards achieving the target ratio of 2.5-times the residential tax rate. 15. City Council request the Chief Financial Officer and Treasurer to report to City Council before the 2021 Budget process on the threshold for Residual Commercial tax rates for Band 1 and Band 2 of $1,000,000 and on whether the threshold can be increased and on how the rates for the two bands can be altered to better help smaller businesses. 16. City Council request the Chief Financial Officer and Treasurer to report, as part of the 2021 Budget process, on revised ratio targets that will reduce the annual tax policy shift onto the residential class arising from reduced ratios for the commercial and industrial tax classes.