Item - 2024.EX16.16

The Executive Committee recommends that:  

1. City Council authorize the levy and collection of taxes for the 2024 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 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.

3. 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 2024 taxation year on railway roadways and rights-of-way and on land used as transmission or distribution corridors owned by power utilities, totalling approximately $6,996,373 in taxation revenue, of which the municipal share is $6,487,844 and the provincial education share is $508,529.

The 2024 levy has remained consistent with the 2023 levy total of $6,996,832 (with a $6,488,196 municipal share and a provincial education share of $508,636). For 2024, the prescribed property tax rates for railway rights-of-way and hydro corridors remain unchanged from 2023.

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 $3,468,799 would be generated from the levy in 2024. This additional levy would be inclusive of the educational portion of Hydro One's levy of approximately $3,214,409.