Item - 2023.EX6.9

The Executive Committee recommends that:  

1. City Council authorize the levy and collection of taxes for the 2023 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 request the Province of Ontario to enact regulations to prescribe a levy on Railway Roadway and Rights of Way and on Power Utility Transmission and Distribution Corridors for the 2023 taxation year, reflecting inflationary increases since 2018 when the current rates were reached.

This report seeks Council authority for the introduction of the by-law necessary to levy and collect taxes for the 2023 taxation year on railway roadways and rights-of-way and on land used as transmission or distribution corridors owned by power utilities, totalling approximately $7.00 million in taxation revenue, of which the municipal share is $6.49 million and the provincial education share is $0.51 million.

The 2023 levy has decreased slightly from the 2022 levy total of $7.05 million (with a $6.54 million municipal share and a provincial education share of $0.51 million) due to a reduction in the 2023 total acreage subject to this levy. For 2023, the property tax rates for railway rights-of-way and hydro corridors remain unchanged from 2022.

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 $3.05 million would be generated from the levy in 2023, including an increase in the municipal portion of revenues (including the Education share of Hydro One levy) of approximately $2.82 million.