The Greater Niagara Chamber of Commerce (GNCC) wishes to comment on the current budget debate over the proposed infrastructure levy, namely, that the city is raising taxes by 4.16%, and then adding an infrastructure levy of a further 1% on top, to create a 5% total tax rate.
The 5% figure is part of a whole, not a definitive figure. The rise in St. Catharines municipal taxes must be balanced against the zero raise from the Niagara Region. The total tax bill is a combination of taxes from the City, the school boards, and the Region. The total increase in taxes – including the infrastructure levy — is 2.16%, which is barely above the rate of inflation.1 This is the actual increase that city residents will see on their tax bill, and translates to an average of $69.65 a year.2
The infrastructure levy represents 0.98% of the city’s tax levy, and 0.4% of the total combined levy.3 St. Catharines currently faces a $140 million infrastructure gap on the city’s roads, bridges, and sewers.4 The business community understands that tax hikes are not good for business; however, deteriorating infrastructure is also not good for business. Business depends upon effective public services. These systems and organizations cannot be allowed to fall into neglect without risking the health of the business community.
St. Catharines’ tax bill is currently one of the lower burdens in Ontario. The median residential tax burden in 2015 was $3,377; St. Catharines paid $3,097.5 The median water and wastewater rate was $938; St. Catharines paid $842.6 While the St. Catharines municipal tax burden as a percentage of household income is slightly above average, this must be balanced against the cost of living.7 Office building property taxes are about 9% less in Niagara than the average in Ontario, industrial property taxes about 12% less, and vacant industrial land rates 29% less.8 The Canadian Taxpayers Federation gave St. Catharines a grade of B— on its municipal report card, the highest grade awarded, in 2013, citing St. Catharines’ excellent ratio of high-income public servants to households and successful efforts to keep public-‐sector salaries down.9
Comparisons have been made between the infrastructure levies in Guelph and St. Catharines, but the GNCC does not believe this is a straightforward comparison. The Guelph infrastructure levy will be two percent, as opposed to the St. Catharines levy of one percent. Guelph’s tax burden is almost 20% greater than that of St. Catharines.10
The GNCC understands that an asset management plan and a full service review — neither of which has been conducted in Guelph — are either complete or underway in St. Catharines.11 In the 2015 Budget, for instance, the asset management plan revealed that savings in Category 3 facilities (which are rated relatively low in service life, building condition, and current/future use and would be good candidates for sale, demolition, or decommissioning) could be $82,673. Additional partnership or sales possibilities might add another $264,288.12 It is clear that savings in the budget alone could not come close to addressing the $140 million infrastructure gap without being accompanied by deep cuts that would have a serious impact on the quality of life for residents and businesses — or increased taxes.
A $1,000,000 commercial property in St. Catharines pays $34,589 in total property taxes.13 The infrastructure levy would cost the owner of this property an additional $107.14 per year. This is not, as has been alleged, a full-time equivalency (FTE) and is very unlikely to lead to layoffs or job losses.
Given the need to address the sizable St. Catharines infrastructure gap, the infrastructure levy seems reasonable. While the GNCC and the business community do not applaud tax hikes by any means, we also recognize that government services are necessary to the functioning of society and must be provided.
- City of St. Catharines, 2016 Draft Operating Budget (http://www.stcatharines.ca/en/governin/2016-‐Draft-‐Operating-‐ Budget.asp?_mid_=34789)
- Walter Sendzik, Hard work, consultation went into city budget (http://www.stcatharinesstandard.ca/2016/03/02/sendzik-hard-work-consultation-went-into-city-budget)
- BMA Management Consulting Inc. Municipal Study – 2015 (http://guelph.ca/wp-content/uploads/2015FinalMunicipalStudyGuelph.pdf)
- Niagara Region, Property Tax Comparisons to Other Municipalities (https://www.niagararegion.ca/government/budget-taxes/Municipal-Tax-Comparisons.aspx)
- Canadian Taxpayers Federation, Ontario Municipal Report Card 2013 (https://www.taxpayer.com/media/Ontario%20Municipal%20Report%20Card(1).pdf)
- BMA, op. cit.
- City of St. Catharines, Asset Management Plan 2013 (https://stcatharines.civicweb.net/document/13953)
- City of St. Catharines, Budget 2015 Asset Management – Category 3 (https://www.stcatharines.ca/en/governin/resources/15Category3Assets-Feb23.pdf)
- Niagara Region, Property Tax Calculator (https://www.niagararegion.ca/government/budget-taxes/prop-tax-calculator.aspx?c=St.+Catharines&t=Commercial&p=1000000)