Provincial Land Tax Reform

Several years ago the provincial government announced its intention to reform the Provincial Land Tax, the property tax paid to the province in areas where there is no local municipal government. NOTO participated in consultations held in 2004, and many operators received visits from Municipal Property Assessment Corporation inspectors last summer. This summer, information sessions are being held throughout most of northern Ontario to provide an update on the process.

The basic idea behind PLT reform is pretty straightforward – the government wants all property taxes to be based on market value. This is a general principle that is accepted throughout the provincial government. It is also true that tax rates for the PLT have not changed in a very long time. However, NOTO has serious concerns about the implementation of PLT reform that we expressed during the initial 2004 consultation and continue to express.

Most of the properties involved are remote and relatively low in value. It is difficult to imagine how the numerous site visits conducted by MPAC inspectors can be justified. The Provincial Resource-Based Tourism Working Group developed a single province wide value to be used in establishing land value for the purpose of outpost leases. This approach has been accepted by the Ministry of Finance. It makes perfect sense to utilize this value for PLT purposes, as well.

For PLT purposes it will also be necessary to establish the value of the buildings. We and other organizations proposed that a simple formula be developed based on square footage. Remote outposts do not vary all that much in construction, and such a simplified system would be very inexpensive to administer. Since site plans are submitted to MNR as a requirement of Land Use Permits or leases, it would save time and duplication to simply use this information.

It has been NOTO’s position that the taxes must be reasonable in light of the very low levels of service received. Furthermore, any taxes collected should be used in ways that benefit the local communities. Of course, it is important to recognize the impact of any increased costs on our industry during these difficult economic times.

Until the local consultations began in mid August, no information was available on what impact these changes would have on your taxes. The tax rates have now been announced, along with a commitment from the minister that this reform would not generate any new tax revenue for government. Under this scheme, it is estimated that about half of properties would see a tax decrease while others would have their taxes go up.

At the information meeting NOTO attended, there was widespread concern expressed over how the Municipal Property Assessment Corporation conducts assessments. We heard many stories last year about expensive site visits to remote outposts and complex information request forms from MPAC. It will be important for the provincial government to provide much better direction and oversight to MPAC if their process is to be seen as credible by taxpayers.

NOTO intends to continue to press these points with the provincial government and to work with other interested groups to create a common voice on this issue. We intend to continue to work with the Ministry of Finance to develop a simple assessment system that is integrated with the valuation system used for LUPs and leases, and we will keep you updated on our progress and on any new opportunities to make your views known.

This article was taken from page 8 of NOTO's "The Outfitter" publication, Fall 2008 Issue


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