Posted June 20, 2013
Congratulations on becoming Ontario’s Minister of Education.
Following your elevation to Cabinet, there is a pressing Guelph issue that requires your attention and action. It concerns the amount of property taxes the University of Guelph pays in lieu of property taxes.
In 1983, the provincial government approved a plan that all universities in the province would pay a “bed tax” of $75 per registered student in lieu of property taxes..
Now, some 30 years later, the rate has not changed. Calculating the worth of the dollar in 1983 to today, it is not difficult to understand the universities have the deal of the century. Throw in the increasing cost of living in 30 years and the deal becomes even sweeter.
The universities are paying bed tax rates in 1983 dollars while the exacerbated rate of inflation in 30 years further diminishes the contribution to the City of Guelph.
Today Minister, the University of Guelph paid $1,6500,000 in lieu of property taxes.That is a minor contribution in tax revenues for a corporation worth more than $400 million.
The University is unique in Ontario. It owns hundreds of acres in the city with much of it vacant or leased to public and private enterprise. The institution’s holdings run from just east of the Hanlon to Victoria Road. It owns property on both sides of Stone Road much of it leased providing a stream of revenue to the school’s coffers.
In fact, the University has been in the land development business for a number of years.
Minister, this week it was revealed that a small parcel of University property fronting on Victoria Road was in the process of being sold to Reid’s Heritage Homes for an undisclosed amount. Ordinarily this would not make the real estate page. But there were some revelations in the report that should be brought to your attention.
Don O’Leary, the University’s Vice President of Finance and Administration, stated that proceeds from the sale of “University Heritage” lands goes into a $228 million endowment fund that grew by $10 million from 2011 and 2012.
The money is used for student assistance, faculty chairs, research and infrastructure support. Translated that means undefined student assistance, recruiting highly respected academics for teaching and research, building and renovating university buildings.
Minister, that’s an admirable achievement and all they have to pay for all that land, facilities and revenue producing properties, is $1.65 million per year in lieu of property taxes.
The taxpayers of Guelph have to subsidize the public transit system by some $15 million that transports thousands of students during the school year. They pay for maintenance of the streets and roads that are used daily by University staff and students. They pay for emergency services such as police, fire and EMS. They pay for water and sewer connections and service. They pay for civic staff services required by the University for planning and infrastructure applications.
I’m sure that your government doesn’t want to touch this with a barge pole. It is rife with dangerous political shoals.
The University of Guelph stands alone among the Ontario institutions of higher learning. Because it was once an Agricultural and Veterinary College with hundreds of acres and few neighbours, it has become the centre of the growing city with ownership of lands surrounded by residential growth.
Minister, this situation is an unfair burden to Guelph taxpayers, many of whom are your constituents. Only your government can change the arrangement that is outdated and a detriment to the civic operations of Guelph.
Here’s how to change it by amending the original Act. Increase the bed tax rate over three years. Start with year one $125; year two $150; year three $175. The final figure would be indexed to the official rate of inflation in succeeding years.
In this way, all universities in the province would benefit, not just the University of Guelph.
This would not require provincial funding. It will require the schools to realistically budget the increase but not increase tuitions. In the University of Guelph’s case, there is ample revenue stream to cover the increased costs of paying a fair share of property taxes.
The pay back is a fairer arrangement for municipal taxpayers living in communities with universities.
Mister, the people of Guelph are counting on your influence to correct this situation.
Editor – guelphspeaks.ca