By Joan Albright

In response to J.R. Hunt's letter in the Owen Sound Sun Times on September 24, 2014, I feel we should take a long look at the root causes for the current level of local property taxation. So as not to bore anyone to tears, a whimsical look at the situation seems appropriate. This is part one of a three-part story.

Once upon a time, in the magical land called Ontario, run by the "Magician," 832 creatures of Ontario aka: townships, villages, towns, cities and counties, lived happy, relatively autonomous lives. But revenues for the creatures' local services were always hard to raise, especially in townships mainly comprised of farmland. The post-World War II development boom had put a great strain on the creatures to keep up with the service demands of their inhabitants. So they went into great debt to provide services such as roads and paving, snow removal, salt/sand spreading, bridges, community centres, water and sanitary sewer mains, sewage treatment plants, water wells & towers, and later garbage and recycling pickup, landfills, planning services to ensure responsible development for residential subdivisions and severances, policing and fire protection, central elementary schools, urban high schools, and all the administration to provide the services and the costs to meet the standards set by the Magician.

The creatures' increasing debt caused the Magician to control their debt, which was good. Instead, the Magician would provide unconditional grant funding for the creatures to use as they wished. The Magician would also provide conditional funding to promote the Magician's agenda. So great were the opportunities to spend the conditional funding (for water & sewer expansion, recreation facilities and the like), which only covered a portion of the costs with the balance to be raised by the creatures, that some of them (Wiarton) came under the Magician's control as they had exceeded their spending and borrowing limits in order to obtain funds for their projects. In other words, they were led into bankruptcy by the Magician. The Magician worked its magic again and all became well for the over-extended creatures.

The unconditional grants were wonderful. They provided revenue for the creatures to spend as they pleased. Some of the conditional grants, however, were a double-edged sword, especially for the township creatures. The Magician provided 75 per cent to 100 per cent funding to the townships for their road and bridge building and equipment as well as for their roads and storm water operational management, including winter maintenance and their inhabitants soon became accustomed to the good level of services this provided out in the farmland. Even with this level of the Magician's funding, the Ontario Federation of Agriculture lobbied the Magician to reduce the townships' farm taxation in order to support the farmers who were hard pressed to make a decent living. The Magician agreed and so began the Farm Tax Rebate Program, whereby the farmers paid their full farm-related tax to the townships based on the full residential rate and received a 75 per cent rebate directly from the Magician. This was good for the townships as they received the full tax and the Magician covered the cost of the rebate. It was like another unconditional grant!

As the Magician lost interest in the welfare of its creatures, it worked its magic and reduced their number through restructuring - amalgamations. Now the Magician reduced the creatures to 444, which made life simpler for the Magician. However, the creatures discovered that after amalgamations, they were receiving fewer conditional and unconditional grants for routine services - the great equalizer for the townships who didn't have a large commercial or industrial tax base to tax and relieve some of the tax burden for the farmers and residential taxpayers. No more operating and capital road grants to the townships, which were largely agricultural with hundreds of miles of roads & even more kilometres.

The Magician made the annual road construction and maintenance grants, the bridge grants, the share of Bell Telephone Receipts, the annual capital equipment grants, the equalization grants, the general support grants, etc., etc. just disappear - like magic.

The Magician also made the Farm Tax Rebate Program disappear. Instead, farmers would only pay 25 per cent of their farm-related tax to the townships so they wouldn't have to wait for a rebate from the Magician.

Then the Magician magically downloaded the cost of policing to the townships. To 'offset' some of the costs downloaded to the creatures in 1998-1999, the Magician decided to take over some of the education revenue formerly included in local tax rates, thereby leaving room for the creatures to take over that portion of the existing tax rates. However, the big creatures - commonly known as the "counties" - took up all the room to pay for the costs downloaded by the Magician to them and the townships were forced to collect the Counties' levies leaving their own needs wanting. How could the townships levy enough property taxes to cover their increased costs? Well, they couldn't.

To be continued, in Part Two.