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Thunder Bay's Tax Crisis

Thunder Bay's Tax Crisis

Large Majority of Citizen do not want the Turf facility

THUNDER BAY, ONTARIO ~~~~ August 29, 2020 (LSN)  As expected, Monday evening’s City Council Meeting was a long one wrapping up at 3am and as predicted the Turf facility is going forward if by a slim margin of  7-6 in favour.  For the record to assist you in decision making next election, those in favour of spending more money despite the caveats: Mayor Bill Mauro and councilors Albert Aiello, Shelby Ch'ng, Andrew Foulds, Cody Fraser, Kristen Oliver and Aldo Ruberto.  Those in favour of delaying the project in light of the current situation: Mark Bentz, Trevor Giertuga, Brian Hamilton, Rebecca Johnson, Brian McKinnon and Peng You.  In the end, Mayor Mauro got what he wanted and one wonders why he risked so much political capital to drive something that a large majority of the public seem to oppose.

The evening also discussed the budget and originally there was a proposal to raise the 2021 tax levy by 3.45 percent in order to deal with the $8.4 million in COVID-19 expenses – though left unexplained is why with $9 million in provincial and federal assistance coming, are those costs for 2020 not largely taken care of.  In the end, apparently the increase is now proposed at only 2 percent but that will likely change given Thunder Bay’s deteriorating tax base and the “need” for more money.  And, there was plenty of evidence in the documentation for Monday night’s meeting on the eroding tax base.
I suppose there was little time at Monday night’s meeting to discuss other items of business such as Corporate Report No. R 18/2020 included in the Committee of the Whole Agenda and buried on pages 236 to 239 (with a lengthy Appendix afterwards).  This report was on Property Tax Accounts with 2018 Arrears.  Of course, the table of numbers spanning properties that stopped paying their taxes over the 2008 to 2018 period was probably too much to process for the bleary eyed councilors.  Sometimes one wonders if City Council is some type of cult designed to ram through decisions by handing councilors 300 page documents and then depriving them of sleep with long meetings.   Of course, the more alert ones in favor of the turf facility may have been alarmed at the prospect of discussing the growing number of tax arrears properties at the same time new spending was being proposed and heaved a sigh of relief it did get too much attention.  Nevertheless, I suspect the numbers themselves would have little impact - pictures are much better and as usual I had to provide my own.
Figures 1 to 3 takes the data in the report and plots the number of properties (both total and residential) in tax arrears, the total value of tax arrears by year in dollars, and finally the value of those arrears as a percentage of the total tax levy that year.  The plots are disturbing as despite the occasional up and down, they show a clear upward trend over time.  Whereas the average annual number of properties in arrears from 2008 to 2010 was close to 100, for the 2016 to 2018 period, it averaged close to 300.  In essence, the number of properties in arrears has tripled over the last decade.  It is not just business properties, it is also residential.  The value of the tax arrears in 2018 was $2.5 million – a not inconsequential sum given that the original proposed tax increase of 3.45 percent would have likely added nearly $7 million to the tax levy.  Indeed, as a percentage of the tax levy, the trend is also upwards and reflects foregone revenue – which if looked at cumulatively since 2008 represents the evaporation of nearly 10 percent of the tax levy.
</p> <div> </div> <div><span style=">If property owners in Thunder Bay are stopping to pay taxes on their properties and giving up on them, there is a serious issue.  The solution is not stricter enforcement and chasing people down by hiring a Sheriff of Nottingham type with a half dozen tax facilitators and support people to extract the cash.  There are probably many reasons why people are unable to meet their tax obligations and give up on the property they are holding. 

For some, it is being on a fixed income or job loss or health issues.  Some are seniors with dementia whose families have lost track of the properties.  For others, it is a simple calculation: - given diminished circumstances, the value of what they own is not worth keeping given the tax burden that has been imposed.  This is apparent from some of the properties listed which are undeveloped lots and properties being taxed at high rates but often in locations where there is no prospect of them ever being developed let alone a market buyer found due to plans, zoning rules and regulations that only Thunder Bay insiders can navigate.   
What kind of city lets this happen?  How can so many councilors talk incessantly about how they care about social justice and equity and helping the socially deprived and at the same time not realize the long-term effect of their decisions, policies and actions in raising the economic burden on workers and families in Thunder Bay?  It is not just a provincial or federal responsibility.  Its theirs too.



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The Northern Economist blog started on Shaw Webspace as commentary and analysis of economic issues and policy from a Northern Ontario perspective by Livio Di Matteo, Professor of Economics at Lakehead University in Thunder Bay, Ontario, Canada. It had regular posts from November 2010 to February 2012. Posts continued on Northern Economist 2.0 until 2013 when I took an extended break. Occasional posts resumed effective December 2016. With Shaw terminating its blog space functions, I have archived the old posts at:



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