Item - 2021.EX25.19

The Executive Committee recommends that:

1. City Council authorize the levy and collection of taxes for the 2021 taxation year on railway roadways and rights-of-way and on land used as transmission or distribution corridors owned by power utilities, in accordance with subsection 280 (1) of the City of Toronto Act, 2006 and subsection 257.7 (1) of the Education Act.

2. City Council receive Attachment 2: Acreage and Tonnage Taxation Systems to the report (June 3, 2021) from the Controller for information.

3. City Council request the Province of Ontario to explore the impact of national railways converting to a tonnage-based levy system, as opposed to the current rate per acreage system in the Province of Ontario, to determine any benefits to municipalities.

4. City Council forward the Item to the Ontario Good Roads Association, the Association of Municipalities of Ontario and the Federation of Canadian Municipalities for their information.

This report seeks Council authority for the introduction of the by-law necessary to levy and collect taxes for the 2021 taxation year on railway roadways and rights-of-way and on land used as transmission or distribution corridors owned by power utilities, totalling approximately $7.05 million in taxation revenue, of which the municipal share is $6.54 million and the provincial education share is $0.51 million.

The 2021 levy has decreased from the 2020 levy total of $7.1 million (with a $6.6 million municipal share and a provincial education share of $0.5 million) due to a reduction in the 2021 total acreage subject to this levy. For 2021, the property tax rates for railway rights-of-way and hydro corridors remain unchanged from 2020.

Taxation of railway lands varies across Canada, with some provinces utilizing a per-acre rate for railway lands, and most western provinces using tonnage per linear kilometre rates.  In Ontario, per-acre rates are not increased annually.  From 2005 to 2016 railway rates remained static, followed by modest rate increases in 2017 and again in 2018, with no rate increases since.  If railway and hydro rates had been indexed to inflation to reflect increases in the Consumer Price Index in each year since 2005, an additional $2.2M would be generated from the levy in 2021, including an increased in the municipal portion of revenues of approximately $1 million.