Parker Gallant: Green Energy Agenda usurps Property Assessment and Municipal Tax Base

The Ontario Liberals, via the Ministry of Finance, gave marching orders to the Municipal Property Assessment Corporation (MPAC) yesterday tellingthem to not increase assessments for “property owners who install renewable energy technologies”.
Property assessments increase when property improvements are made. As soon as a building permit is issued the municipality sends a copy to MPAC. That permit copy is used by MPAC to increase the assessed value of the property and the following year property owners pay additional property taxes because of the increased assessment.

The headline on the Government press release read; “Improving Property Tax System for Green Energy“ but it comes at the expense of others who can’t afford the installation costs. This change will impact municipal tax revenue increases that have normally accrued though the issuance of those building permits.
The press release carried the endorsement of Dwight Duncan, the Minister of Finance who will soon be told by economist Don Drummond to slash spending or miss (by years) balancing the budget by 2018. Minister Duncan had this to say in the press release: “Ontario is leading the way when it comes to producing reliable energy from clean, renewable sources. These changes will help ensure that property tax assessment does not discourage property owners from contributing to a green energy system that supports a cleaner environment and healthier families.” The message is clear; if you have the money to invest in renewable energy Ontario ratepayers and taxpayers will ensure you earn a healthy return!
As an example; the costs of a solar installation of say 10 kilowatts (kw) will cost from $58/$80,000 depending on location and whether it will track the sun’s movement. Under the MicroFIT program the installation is estimated to generate from $93/$150,000 profit (over 20 years) depending on the installation type chosen.
Mr. Duncan’s salvo against the municipalities will not help achieve a balanced budget for the province and might make it worse if he weakens the municipalities tax base. Those municipalities (mainly rural) with lots of small installations of wind, solar and anaerobic digestion electricity generation will be knocking on the doors at Queens Park or face the ire of their local property owners who will see the mill rate and their taxes increase. Building permits, which normally signal increased municipal tax revenues will mean nothing other then the fees collected for the permits.
The Association of Municipalities of Ontario (AMO) has an MOU (memorandum of understanding) with the province and their website contains the following message under their “Mandate”; “The MOU provides the opportunity for municipal input and reaction to provincial policy ideas (pre-consultation) so that they are fully informed as part of any provincial policy making process.” We understand that AMO was “aware” of the plan by the Finance Minister to direct MPAC to treat the assessment of renewable energy installations differently but the extent of the “pre-consultation” process was not fufilling and AMO has sought clarity.
AMO has taken issue with many aspects of the FIT and MicroFIT programs as is evident from their submissionof December 6, 2011 to the Ministry of Energy and the Ontario Power Authority (OPA) wherein they have made 14 recommendations to improve their role in these programs. It appears the fallout of the Finance Ministry’s press release of January 4, 2012 treats the municipalities with the same respect as they were given under the Green Energy Act—absolutely none!

Parker Gallant,
January 5, 2012

Comments

Anonymous
Reply

If Duncan was being honest (not a Liberal policy apparently)his release would have said “Ontario is leading the way when it comes to producing unreliable energy from massively subsidized sources which drive up energy costs and drive out industry. These proposed changes in the assessment system will help ensure that non participating rural property tax payers will have to pick up the slack in addition to suffering loss of their property value and adverse health effects. Everyone in Ontario is negatively affected by this boondoggle through overpaying for energy we do not need and often have to dump. The needlessly expensive Liberal “greed” energy system needs to be shut down.”

Just when you thought they had done as much damage as was possible they find new ways to add insult through idiocy.

Karen
Reply

It seems the Municipalities were euchered again. Municipalities’ powers under the guise of increased flexibility and uniformity throughout the Province have been steadily eroded. Revisions of the Municipal Act have been the thin wedge so that people in their local communities no longer have the right of self-determination. At least under limited government on a smaller scale, it was possible to make voices heard and translate their desires into action to suit a local community. We now all have to conform to the NEW WORLD ORDER! –ONE SIZE FITS ALL. This does not work as evidenced where large “national” bodies held together by force and were torn asunder because of differences within those bodies in culture, religion, etc. The setting of certain uniform standards across a nation in view of trade and commerce on an International scale is understandable. However, to take away local governance and allow for individual freedom of action within a community is not an inducement to liberty and innovation.

By the establishment in 1998 of MPAC the Municipalities lost the control of setting values on property for taxation and now can only establish mil rates across the board in order to raise revenues for their very existence. In a new step of usurping local powers, the Province dictates these values to MPAC, there is serious cause for concern.

“MPAC is accountable to the public through a 15-member Board of Directors. Eight members of the Board are municipal representatives; five members represent property taxpayers; and two members represent provincial interests. The Minister of Finance appoints all members of the Board.”

On the surface it would seem that as only two members of the board represent provincial interests, the remainder should outnumber the dictates of the Province. However, since the Minister of Finance appoints ALL members of the Board, that immediately should in retrospect have raised a red flag. If Municipal appointees do not please the Minister of Finance it appears the Minister could use levers of control.

If MPAC therefore buckles and follows through with this mandate from the province and the Municipalities do not have a recourse to overthrow this, it seems that rather than burden ALL property owners with costs of the few that benefit from this mandate, licence fees for these improvements should be given consideration. It is still within the realm of legal rights of the Municipality to enact licensing fees.

Imagine the uproar if Jim Flaherty directed Revenue Canada that in future the 1% of highest earners would not be charged income tax beyond the minimum tax base rate, but that at the same time this loss of revenue would be spread to ALL taxpayers!

Appealing Property Taxes
Reply

yes i totally agreed with Karen. All burden are on the tax payers . Government is trying to recover their expenditure through the wrong way. They must focus on the right way. I think they are not getting the correct way.
But still for the property tax payer their is way to reduce their property tax they can appeal for the property tax assessments.

Thanks for your great post, there are much nice information that I am sure a huge number of guys and gals don’t know.

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