Item - 2026.EX30.4

The Executive Committee recommends that:

1. City Council adopt reductions in tax decreases for the 2026 taxation year on properties in the commercial, industrial and multi-residential property classes by the percentage of the tax decrease set out in Column II in order to recover the revenues foregone as a result of capping, and to allow the decrease percentages set out in Column III:

2. City Council authorize the introduction of the necessary Bills in City Council to give effect to City Council's decision.

In accordance with legislative requirements, City Council must annually adopt the following by-laws associated with property taxes:

- the municipal levy;

- the education levy; and

- the clawback rates.

These by-laws are required to enable the City to issue the final property tax bills for the year, for both municipal and school purposes. Following City Council's adoption of the 2026 municipal and education property tax rates at its meeting on February 10, 2026, this report sets the clawback rates and requirements for the commercial, industrial and multi-residential property classes.

In February 2026, City Council adopted the continued policy of limiting ('capping') allowable tax increases to a maximum of 10 percent of a property's prior year's annualized taxes for properties in those classes with a property tax bill increase greater than $500. This capping policy protects commercial, industrial, and multi-residential properties from significant annual tax increases.

The tax capping and clawback policy as well as the property tax rates must be adopted by City Council prior to setting the clawback rates. Once adopted, staff can then determine the funding requirements of the program and, to capture the lost revenue from properties that are capped, calculate a clawback rate. This clawback rate effectively withholds part of a property’s decrease due to reassessment, as applicable.

This report recommends the 'clawback percentage', which represents the amount the City will retain from any decreases in property tax bills, to offset the capping policy. As a result, properties that would otherwise see a tax reduction due to reassessment may not receive the full decrease, since a portion is withheld to help offset the revenue lost from capped tax increases on other properties. Given the Province continues to postpone reassessment, the number of properties impacted by this policy is minimal in 2026.