By Gerry Barker
August 30. 2018
It has always been a mystery to me why the City of Guelph has stifled real economic growth across all assessment levels as compared to similar and neighbouring municipalities.
A friend sent me a detailed study of the average cost of homes in 25 Canadian cities and a deeper illustration of the average home values and property tax rates in the Greater Toronto Area.
In the Canadian study by Zoocasa, a reputable company that analyzed real estate values and property tax rates across the country, I should emphasize that the following data is sourced directly from each municipality’s official websites.
Let’s compare Guelph’s tax data with a number of municipalities in Ontario and Canada.
As of June 2018, the average home price of Guelph is $436,600. The property tax rate is 1,17125. Of the 25 Canadian municipalities in the study, Guelph was rated as number 20
Here are comparisons contained in the Canadian study:
Municipality Cdn home value tax rate (less than Guelph)
Kitchener 19 $489,607- 1.12975 (.0415%)
Waterloo 16 $489,607 1,10785 (.0634%)
Guelph, Kitchener and Waterloo all have major universities and community colleges
In the GTA study here are other comparative property tax rates and home values:
Municipality GTA home value tax rate (less than Guelph)
Barrie 20 $479,579 1.0000 (.1725%)
Caledon 16 $874,690 .84010 (.330115)
Milton 5 $701,595 .69790 (.47335%)
Oakville 9 $1,074230 .75280 (.41845%)
The growing hidden costs boosting property taxes in Guelph
Before discussing in detail, there are four major elements determining how much you pay to own property in Guelph:
* The tax rate
* User fees
* Manipulation of expenses by city council
Prior to each budget, council sets the property tax rate based on the anticipated revenues and expenses produced by the professional staff. Funny thing is that the rate never goes down.
Each property is assessed by the independent Municipal Property Assessment Corporation. Any increase, coupled with the tax rate determines the basic tax bill.
User fees are optional charges for using public assets and properties. Examples include Guelph Transit, rinks, recreation centres, libraries, civic museum, swimming pools, various park events, city waste facility etc. But not use of bicycle lanes and paths
In Guelph, city council offsets essential water treatment and storm sewer costs to be collected separately in your hydro bill. In our case, that’s another $600 a year not included in our tax bill. Also include the 2 per cent property tax levy that is buried in your tax bill.
* * * *
The exodus from Toronto’s high cost home prices of young families to seek lower cost homes has caused higher home prices in some, but not all, surrounding cities and towns. Those seeking lower housing costs should understand that not all municipalities are equal when it comes to paying property taxes and user fees. Also to be considered is the track record of potential municipalities in terms of the growth of property tax rates and appreciation of home values over time.
Out of the 25 major Canadian cities studied by Zoocasa, Vancouver ranks the best for property taxes with the lowest rate of 0.24683 per cent; that’s less than half the rate of the next highest city, Abbotsford, BC that has a rate 0.51300 per cent. In fact, the best cities with the lowest property tax rates were generally found in BC, with Victoria at 0.52035 per cent and Kelowna at 0.52605 per cent.
However, living in a region with a low tax rate doesn’t necessarily translate to less tax paid if average home prices are higher. For example, the Toronto tax rate is 0.63551 per cent, which translates into $5,532 of property taxes based on the average June 2018 home value of $870,559. In comparison, the Edmonton tax rate is 0.86869 per cent or about 1.4 times that of Toronto’s, but the average home value in Edmonton is substantially lower at $381,520, which would result in a lower amount of property taxes overall of $3,314.
This is not the case in Guelph where an increase in new property development will drive city property taxes much higher.
This illustrates the property tax and user problems facing Guelph. Already we have a high tax rate of 1.17125 per cent and an average home price of $436,600, any increase in home prices in Guelph will result in higher taxes for all existing property owners. It’s because of the existing high property tax rate accompanied by surging home values.
There is also a large range in property rates for Ontario cities: London’s rate of 1.35082 per cent is more than double Toronto’s rate while Ottawa’s rate of 1.06841 per cent is 1.6 times that of Toronto.
All property tax rates were sourced from municipal websites.
The last three Guelph administrations have propelled a property tax rate crisis. Guelph resident Pat Fung, a chartered accountant, two years ago, sounded the alarm by analyzing the financial data as published by neighbouring municipalities.
The result revealed that Guelph’s operating overhead far exceeded that of Cambridge and Kitchener. His detailed report was presented to city council that ignored the details. The weekly newspaper turned down publishing the report and also a paid ad to explain the details.
The current Mayor campaigned in 2014 how he was gong to reduce property taxes to the level of the Consumer Price Index that was 1.55 per cent. In his first budget the city council voted to increase property taxes that eventually were 3.96 per cent.
Since 2007, city council has increased property taxes annually by, on average, more than 3 per cent.
While other municipalities were more prudent in delivering economic development, such as industrial and commercial assessed clients, Guelph’s leadership proceeded to focus on ill-planned and executed environmental and energy projects. This was accomplished at the expense of major capital expenditures such as the downtown library and much needed infrastructure repairs and maintenance. It has resulted in few benefits to all citizens and at a terrible waste of public funds.
The majority members of council have perpetuated these annual property tax increases. Now we discover the proof of the disastrous decisions that have been made and the lack of major financial planning and execution.
This is the most important election the city faces next October. In my opinion, there are seven members of council who should be replaced, chiefly based on the dereliction of duty to fairly represent the people who elected them.
What further information is necessary to come to this conclusion? Guelph is a high-taxed city that is ripe for a high level of residential development
But the Toronto Star ignored Guelph in its analysis of the growth of communities outside the GTA as buyers look for more affordable homes.
The real concern is the property tax rate that will impact the residents who already live here. They are already paying a two per cent levy on top of their regular tax bill to finance those neglected capital projects mentioned above.
Choose carefully citizens. Change must come to the management of our city. This is the only chance we have to elect a new council to make it happen.