Empty property tax rebate hurting municipal coffers and must end

It is time to end local tax rebates to empty commercial vacant properties.

Port Hope is the latest municipalities to join a growing list of angry politicians wanting to end the provincial giveaway to business property owners.

Port Hope Mayor Bob Sanderson spearheaded a motion recently to remove the section of the Municipal Act allowing commercial and industrial property owners to claim a tax rebate between 30 to 35 percent.

The intent of the Vacancy Rebate Program, as the province officially calls it, was meant to give relief to owners when property was empty for an extended period. The idea was to give a helping hand temporarily while a new tenant could be found. And, it blunted any overall negative impact on municipalities who were worried they might lose a vital part of the local economy.

However, some politicians feel the system is being abused, and property owners are deliberately keeping buildings empty to artificially inflate rents rather than filling the vacancies at lower rates.

It also represents a sizable loss in property tax revenues for municipalities. Port Hope lost nearly $70,000. Cobourg missed out on approximately $77,000 in rebates. However, if you combine the town, county and education portion of the tax bill, Cobourg businesses did not pay nearly $200,000.

That is a huge sum for the 18 Cobourg property owners who got rebates in 2015.

Port Hope is not the first group of politicians locally to call for these changes. In Cobourg, it was part of the debates during the last election as candidates chimed in with the same complaint.

Local taxpayer groups have also expressed their desire to see this end, saying it is a form of corporate welfare.

Of course from the outside, this can make a municipality look like it is anti-business or anti-development. But, it seems with the emphasis and investments both Cobourg and Port Hope are making in the revitalization of their respective downtown cores, vacant storefronts and the empty building appears to send a more negative impression.

Considering the fiscal plight of so many municipalities, it seems time to stop the vacancy tax rebates so the revenues can flow back into the local coffers. The amounts may not seem large considering overall income, but it is a time when every penny counts.

It can also be argued homeowners should not be subsidizing businesses. Certainly, nobody wants to see property owners fail. Still, landlords should be subject to market forces just like all others. Trying to inflate rents by leaving empty storefronts and building cannot be allowed.

And, if the property cannot be rented, then the rates should be lowered to make it competitive. It may also give opportunities to some entrepreneurs who might want to start a business but cannot afford the high rents. If the situation is not viable, then sell the buildings.

Port Hope council is right in raising this debate once more. However, the province can no longer be tone deaf. Let’s hope Northumberland MPP Lou Rinaldi can get some momentum going at Queen’s Park and bring some relief to local taxpayers and possibly some action in filling these vacant properties.

Originally published: Jan. 11, 2017


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