- Hub staff

The previous Ontario government made changes to the Municipal Act, potentially allowing municipalities to eliminate the 30% tax rebate for vacant commercial properties. Although the current Ontario government has not committed to proceeding with the program, the City of Owen Sound surveyed its residents and businesses and 94% of respondents supported the elimination of the rebate or had no preference.

According to a report from consultants Municipal Tax Equity (MTE) that came to council this evening, in general those who benefit financially from the rebate supported its continuation. Barry Kruisselbrink, owner of Grey Bruce Property Rentals, reported at council that 13 of his properties are vacant,  which represents a 40% vacancy rate.  He said his rebate for 2017 was under $20,000, far less than potential rental income, denying that the rebate would be any incentive to a landlord to leave a property vacant if a tenant were available.

Comments received as part of the survey, which MTE said had a high response rate and fullsome written remarks, broke down as follows:

"Comments in support of eliminating this program covered the following main points.
- That the rebate is a form of subsidy to a very specific group of businesses and is something that the residential taxpayers should not be funding;
- That the removal of these subsidies for empty units could provide landlords with increased incentive to fill vacant spaces, possibly by lowering rents and encouraging landlords to better maintain the property; and
- Some respondents suggested repurposing the space by converting units to residential or having the City take back vacant lots to create public spaces.

"Comments in support of continuing this program were limited but included the following.
- Three respondents indicated that the high commercial tax rate in Owen Sound is a burden to property owners; and
- One respondent suggested that new, active businesses should be granted a tax relief for a start-up period. This is not really pertinent to the issue at hand and would not be allowed under the Municipal Act, 2001 as it currently stands."

In a recorded vote, council voted 5-3 to postpone any change to the policy until the 10th Street bridge is rebuilt, ostensibly to avoid further barriers to commercial development in downtown. This could mean it would be the 2022 tax year before application was made to the province to end the program, at a cost to the Owen Sound taxpayers of approximately $135,000 per year.