Act now, mayor urges Ontario

December 24 2008

Posted By Monte Sonnenberg, SIMCOE REFORMER

Norfolk Mayor Dennis Travale says a shrug of the shoulders won't correct the significant deficiencies that have crept into Ontario's system of property assessment.

Travale was commenting on Premier Dalton McGuinty's surprising dismissal last week of an assessment system that threatens to jack up taxes on the basis of inflated property values.

The Municipal Property Assessment Corporation issued 4.7 million revised property assessments in Ontario in September. The assessments, which are based on real estate values in selected regions as of Jan. 1, 2008, replace assessments that were last updated in 2005.

The assessed value of residential properties in Norfolk, Haldimand and Brant counties has increased, on average, by 26 per cent. Plans are to phase in the increase in 6.5 per cent increments over the next four years. The new assessment claims that waterfront properties have increased in value by 40 per cent.

Trouble is, the new assessment system locks in property values that were determined at the height of the real estate boom. The market has toughened considerably over the past eight months, with homes taking much longer to sell at lower prices than 2007. As the recession sweeping the global economy deepens, the deterioration in prices is expected to worsen.

McGuinty acknowledged the problem last week, but said it is up to municipal councils to deal with it.

"You would hope that municipal councils would act reasonably and responsibly, given the circumstances, and recognize that that was perhaps an unrealistic assessment," the premier said.

McGuinty is referring to the fact that a higher assessed value does not necessarily translate into higher taxes. If a municipality keeps its tax rate the same in a community where the assessed value of the average home has increased by 26 per cent, households in this category will not see a change in their property taxes. However, homes that have increased in value by more than 26 per cent will pay proportionately higher taxes while those with a new assessment below the average will see their taxes decline.

Travale says a premier has a responsibility to do better than this.

"I'm disappointed that Mr.

McGuinty doesn't understand his own system," the mayor said. "It's a terrible situation. In fact, it is ridiculous. He is directly in charge. He can take steps like British Columbia has and take charge of the system."

Acknowledging that the market for real estate is softening, B.C. Premier Gordon Campbell announced in November that he would freeze property assessments at 2007 levels to account for falling property values. Travale says McGuinty should do something similar rather than entrench assessments that don't account for recent economic turmoil.

Port Dover has the most active real estate market in Norfolk. Monday, Coun. John Wells said he has received little feedback so far about the new assessments. He suspects that will change if Norfolk raises taxes next month during its 2009 budget deliberations.

"That will be the catalyst to determine whether residents use their phones and e-mail to get at their councillors," Wells said. "We expect staff to come in with a realistic budget. This will be a hold-the-line budget. We are not expecting to offer new services."

Dunnville Coun. Lorne Boyko says Haldimand staff also intends to hold the line in 2009. As for calls to revise the latest assessment, Boyko wonders if that is premature.

"I don't see anything in the papers right now that reflects the doom and gloom that is being forecast," he said. "I don't see anyone giving away their properties, at least not at this time. When that happens, you demand action. You don't act on the basis of 'what-ifs.'"

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