Poor public policy on proposed tax exemption | Unpublished

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Unpublished Opinions

Bill Toms's picture
Ottawa, Ontario
About the author

BA (Honours Economics) MA York University
Federal Public Servant for 33 years at National Energy Board, Energy Mines & Resources (NRCAN), Bureau of Competition Policy, Environment Canada and Finance Canada. Retired in 2003 as Senior Chief Resource and Environmental Tax.
Currently Principal at ENTRANS Policy Research. See website for additional information.

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Poor public policy on proposed tax exemption

December 13, 2014

This letter was published in the Ottawa Citizen earlier this week: http://ottawacitizen.com/opinion/letters/letter-poor-public-policy-on-pr...

I am puzzled by the lack of reaction to David Reevely’s excellent article, which reported on a proposal before council to exempt a specific property owner (Ottawa Community Housing) from paying property taxes for education so that repairs can be made.

I see this as being poor public policy for many reasons but it seems to have been on the council agenda. This exemption could easily continue for many years without any public oversight. Furthermore, the shortfalls in the amounts going to education will have to be replaced by increasing the amounts collected from other taxpayers? The report suggests that with the proposed change we would be following in the “footsteps of Toronto.”

Let me suggest a marginally better public policy option. The City of Ottawa should instead ask the province for the same authority that the City of Toronto already has which is to collect a Land Transfer Tax on property sales within the city. All of the proceeds of the Land Transfer Tax (which is not collected from first time home buyers) could then either be put into a general contingency fund to be used in emergencies or to be used specifically to provide improved housing not just by OCH but for others within the city who are facing similar challenges in providing housing either on either a temporary or semi-permanent basis.

I suggest that the City of Ottawa go down the land transfer tax trail that Toronto alone is now allowed to tread. It would be more equitable and all disbursements would be subject to annual council and staff scrutiny. It would not be the blank cheque that the proposed education tax exemption would effectively be providing.

Bill Toms, Ottawa