Council approves 2021 tax policy
The city cuts tax ratios for large industrial and multi-residential properties as councilors unanimously adopt tax policy 2021.
THUNDER BAY – Thunder Bay City Council has approved a 2021 tax policy that reduces tax ratios for large industrial and multi-residential properties, in line with the city’s long-term tax strategy.
This decision will reduce the tax rate of these categories of properties compared to the residential category. However, it also means that they will no longer be immune to municipal tax increases.
An administration report presented advisers with two choices on Monday: Option 1, which reduces tax ratios, and Option 2, which would have maintained the status quo.
Council’s unanimous vote to go ahead with Option 1 will have little impact on the average taxpayer, reducing the 2021 tax increase by just $ 0.57 for the median residential single-family home.
Tax ratios represent the degree to which a category of property is taxed relative to the category of residential property.
Council voted to reduce the ratios to 2.0 for multi-unit buildings (from 2.08) and to around 2.88 for large manufacturers (from 2.93).
The tax ratios for other categories of properties will remain the same in 2021, set at 1.0 for new multiple-unit buildings, around 2.08 for businesses and around 2.37 for industrialists.
By reducing the ratios for the multi-residential category, the city now meets the provincial threshold for tax ratios, meaning that municipal tax increases will now be applied to multi-residential properties.
This will effectively negate the effect of lost revenue due to the reduction in the ratio, said Kathleen Cannon, city revenue manager.
Under provincial policy, tax increases do not apply to multi-residential properties in municipalities where their tax ratio exceeds 2.0.
Likewise, tax increases only apply to half the rate for commercial and industrial properties in municipalities where their ratios exceed 1.98 and 2.63, respectively.
Commercial class is now the only class in Thunder Bay to stay above provincial thresholds, city staff reported.
Coun. Andrew Foulds argued on Monday that those thresholds were essentially arbitrary and said he didn’t necessarily agree with the strategy of reducing non-residential ratios to reach them.
The city also applies progressive taxation to the large industrial property class, in which there are only six local properties. Lower-tier properties valued at less than $ 18.5 million will now be taxed at 96% of the upper tier (up from 90% in 2020).
This means that properties located in the lower bracket will see an overall tax increase of 1.75%, while the property in the upper bracket alone, valued above $ 18.5 million, will see an increase in tax of 1.75%. the tax of 1.88%.
Cannon noted that Thunder Bay businesses would collectively save $ 1.67 million in 2021, thanks to the province cutting school tax rates for commercial and industrial grade properties from 0.98% to 0.88%. . The residential education tax rate remained unchanged at 0.153 percent.
The council voted unanimously to adopt the administration’s recommendations to make the option 1 tax policy changes on Monday.
The final 2021 tax levy is due in two installments, on August 4 and October 6.