Between the Lines
By Gerry Barker
Published June 18, 2011 in the Guelph Mercury
This is a tale of two cities.
One, the City of Guelph, is the “mother city”. The other is the University of Guelph that we will call the “inner city”.
Some 19,000 students occupy the inner city. We call them U-Birds. Most arrive in September and leave at the end of April.
This huge migrant community requires services from the mother city at little or no cost to the inner city. These include subsidized transit, water and sewer connections, streets and traffic controls, emergency services, police and fire, engineering, planning and development.
In return the inner city, by provincial statute, pays some $1.425 million in lieu of property taxes. For each registered U-Bird, the university pays $75. This formula, commonly called the bed-head tax, was established in 1983 and has not been increased in 28 years.
How about your taxes? Are you still paying the same taxes you did in 1983?
Don’t answer the question because we know the answer. Taking an annual tax increase of 2 per cent compounded over 28 years; the average taxpayer in the mother city is paying more than double in property taxes today compared to 1983.
During that period the mother city has grown. Growth carries a price tag. It requires new roads, water and sewer pipes, protection services, education facilities, engineering and planning, cultural facilities and increased civic staff to manage the growth.
Some of these additional costs are borne by the development industry through impost fees of which the new homeowner pays at closing on the purchase.
Growth is not a bad thing. The economic base grows with new businesses and new residents that establish in the mother city. That creates jobs and the need for homes, commercial and industrial services.
The trick is to manage growth so that taxpayers are not overburdened with the costs of development.
The inner city is unique among Ontario colleges and universities. No other post secondary educational institution in the Province has the urban acreage owned by the University of Guelph in the heart of the mother city.
Finding itself surrounded by mother city growth around its properties, inner city management launched into the development business, big time.
The axis of the commercialization of university lands is Stone Road. In most cases the inner city only leases its property to a variety of commercial and residential enterprises. This provides a steady flow of cash to meet expansion of the inner city‘s education facilities and a growing number of U-Birds.
The Stone Road growth was serviced by the mother city at the expense of its taxpayers.
Is the partnership arrangement fair to mother city taxpayers? I suggest not.
A Guelph taxpayer not only pays property taxes but also provincial and federal income taxes plus the dreaded comingled 13 per cent HST. The U-Bird pays little or no income tax. The University pays no business tax although it is in the commercial land leasing business.
The university is not about to magnanimously pay more property taxes because of the ancient arbitrary cap set by the province for payment in lieu of property taxes.
The timing of the provincial election in October is perfect for the mother city council to lobby the province through Liz Sandals, our Member of the Provincial Parliament. The target is to update the inner city’s bed-head tax by at least the compounded rate of inflation since 1983.
It’s the least she can do for the mother city.
Gerry Barker is a Guelph resident. Reach him at email@example.com