Municipal Spending is out of control

Even before Toronto announced its latest property tax hikes yesterday, Toronto took the dubious honour for having the highest property taxes in Canada, according to a detailed report issued by the city of Edmonton. Together with Ottawa, Brampton, Hamilton and London, Ontario municipalities take five of the top six spots on the list.

This is something most homeowners in these cities know intuitively every time they pay their tax bill. Now they have it confirmed by an objective report that compared more than 30 municipalities across Canada.

Toronto ranked first with the highest taxes paid at $3,912, followed by Brampton at $3,826. Ottawa was third at $3,532; Hamilton and London were fifth and sixth at $3,305 and $3,078 respectively. St. John's, Newfoundland, deserves credit for taking last place with the lowest average tax at $1,540, and Surrey, BC was second last at $1,814.

This sad but helpful property tax news is timely as city councils across Ontario prepare their budgets. As well, Premier McGuinty's freeze on assessments for homes expired at the beginning of 2008. Not only will tax rates be going up, but for the first time in a few years homeowners will take a second hit if their home value reassessment shows an increase above the average increase. Assessment changes will take effect for 2009 property tax rates.

What is especially helpful about the Edmonton report is that it compares property taxes in a dollar value instead of as a percentage. Some mayors, like Toronto's Mayor Miller, try to defend high property taxes by hiding behind what appears to be a lower rate than other cities. This is hiding because the average value of a home is high in Toronto so the total taxes paid for a Toronto homeowner are higher. When paying taxes one cares less about the rate paid or the details of the complicated formula used. Instead, one cares about how much money is being taken year over year. That is the only comparison relevant to a taxpayer, not whether the rate is 0.82 in one city versus 1.15 in another city.

The main reason for high and growing property taxes in Ontario is that municipal spending is out of control. Municipalities have a spending problem, not a revenue problem. While mayors continue to clamour for more and more money from many sources, their appetites for spending grow unchecked.

Data from Statistics Canada shows that municipal revenue across Ontario has been running at three times the rate of inflation. In 2006 municipal revenue was up 6.3% while inflation was only at 2.0%; in 2005 revenue was up 7.2% and inflation was only 2.2%. Despite Ontario municipal revenues ballooning from higher taxes, more transfers from other levels of government, higher user fees and new taxes in Toronto; mayors continue to complain that they don't have enough.
It is interesting how mayors can work together cooperatively when it comes to demanding transfers from other levels of government or getting new taxing authority from the province. If that same energy were transferred to creating efficiencies and reducing costs, the report out of Edmonton might show a different -and welcome -conclusion.

- Kevin Gaudet is Ontario director of the Canadian Taxpayers Federation.

This is in addition to the New Toronto Land Transfer Tax now in place. A home of $500,000 in Toronto will cost $6,475 Ontario LTT plus $ 5725 In Toronto LTT.

No one wants to kill the construction engine in the South Ontario real estate market but they sure are trying.

Grenedier Landing Humber Bay Shore

Grenadier Landing 5 Marine Parade Dr.,

BUILDING DESCRIPTION:

Located in west Toronto on the waterfront, by the beach, Grenadier Landing is destined to become Toronto's most exciting new waterfront address. Stunning glass walled condominiums and waterfront townhomes, overlooking the park, the beach, the lake and the city. Suites from 640 sq. ft. up to 1,580 sq. ft., with terraces or balconies and soaring nine foot ceilings.

AMENITIES:

Two storey residence overlooking Parkland and the shores of Lake Ontario Two storey Grand Lobby with access to a beautiful landscaped courtyard 24-hour concierge Elegant party room, casual lounge adjacent to the lobby Hobby/craft room, games room, ping-pong Billiards, video/media room Fully equipped exercise room with lockers Ample Visitor Parking Bicycle lockers on ground floor Guest Suite with balcony BBQ in landscaped Courtyard Steps to bicycle paths linking to Martin Goodman Trail, as well as the 300 kms Ontario Greenway Waterfront Trail

http://www.grenadierlanding.ca/

SUITES:
1 bedroom + den (825 sq. ft.) from $200,000 - $250,000
2 bedroom (866-986 sq. ft.) from $250,000 - $380,000
3 bedroom (1,188-2,000 sq. ft.) from $500,000 - $800,000
3 bedroom townhomes (1,945+ sq. ft.) from $750,000 - $900,000

Sold data and units available for resale information is available.

More women buying their own homes

Seven in 10 Canadian women homeowners bought their properties as a "good investment," says a new national poll released today.

The poll by TD Canada Trust, conducted in the first two weeks of this year by Ipsos-Reid, was among women aged 20 to 45 who have purchased a home as an individual rather than jointly with a spouse or common law partner.

Among this group, the average age when they purchased their first home is 29 years - 82 per cent are single, 80 per cent have no children and 49 per cent have a university degree.

The vast majority (86 per cent) still live in the last home they purchased and have made only one home purchase as an individual (81 per cent.)

"With more and more Canadian women marrying later in life or remaining single, we're seeing the emergence of the young, financially savvy woman who's taking on the commitments, joys and responsibilities of owning a home," said Joan Dal Bianco, Vice President, Real Estate Secured Lending for TD Canada Trust.

Respondents indicated their main motivation for buying a home was that it was a good investment (71 per cent), that they didn't want to pay rent anymore (61 per cent) and their desire to get into the housing market (54 per cent).

More than three-quarters (77 per cent) say their biggest worry prior to purchase was the affordability/financial commitment, while half (51 per cent) cited having to assume homeowner responsibilities such as maintenance and a homeowners legal liabilities.

Overall, condominiums are the most popular option for individual women homeowners (42 per cent), followed by houses (34 per cent), townhouses (13 per cent) and duplexes or triplexes (six per cent). Vancouver women, at 73 per cent, are most likely to buy a condo, followed by Toronto women (52 per cent). In Calgary, Edmonton and Montreal, condos and houses have the same appeal to individual women buyers.

"We are witnessing nothing less than a revolution among individual Canadian women," said Dal Bianco. "Right across the country, they are investing in themselves and in their futures by becoming homeowners, and in doing so are strongly reinforcing their financial and personal freedom." mtoneguzzi@theherald.canwest.com

This survey from the Calgary Herald in almost a mirror image of the Vancouver results published in this blog indicating a six in ten buyers were single females.