(City Council, at its Special Meeting on April 28 and May 1, 1998, amended this Clause by:

(1) amending the joint confidential report dated March 25, 1998, from the Executive Director of Human Resources, the Chief Financial Officer and Treasurer, and the Chief Administrative Officer, entitled "Separation Program for Bargaining Unit Employees", by:

(a) inserting the word "Voluntary" prior to the words "Separation Program" in Recommendation No. (1) and wherever the words occur in the body of the aforementioned report; and

(b) adding thereto the following new recommendation as embodied in the communication dated April 2, 1998, from the Acting President, CUPE, Local 79:

"That Members of CUPE, Local 79, receive transition allowances which include out-placement services, tuition assistance and career transition services.";

so that the recommendations embodied in the joint confidential report shall now read as follows:

"It is recommended that:

(1) Council adopt the Voluntary Separation Program for Bargaining Unit Employees;

(2) this program replace all separation or exit programs, policies and practices in the former municipalities;

(3) all bargaining unit employees of the (new) City of Toronto be advised that separation or exit programs, policies and practices which may have been in place in the former municipalities are no longer in force;

(4) the previously established Reserve for Workforce Reduction initially accommodate the funding of this strategy;

(5) the Chief Administrative Officer, Chief Financial Officer and Treasurer, and the Executive Director of Human Resources be authorized to take all the necessary steps to implement these actions as part of the Workforce Reduction Strategy; and

(6) Members of CUPE, Local 79, receive transition allowances which include out-placement services, tuition assistance and career transition services."; and

(2) adding thereto the following:

"It is further recommended that:

(1) the Voluntary Separation Program for Bargaining Unit Employees be offered only for 1998, and the Executive Director of Human Resources be requested to take into consideration all issues raised by Members of Council in the development of the Separation Program for 1999;

(2) Management retain the right to approve participation in the Voluntary Separation Program;

(3) the Voluntary Separation Program for Bargaining Units Employees be targeted only to increases that will not affect current service levels or Council's ability to set appropriate service levels when Council makes service level decisions later this year;

(4) senior staff make every effort to achieve right-sizing through attrition and voluntary exit packages rather than layoffs;

(5) the Chief Administrative Officer and the Executive Director of Human Resources be requested to arrange a briefing for Members of Council on human resources policies;

(6) the Executive Director of Human Resources and the Chief Financial Officer and Treasurer be requested to:

(a) submit a report to the Corporate Services Committee with respect to the possibility of OMERS Type 7 and other related OMERS programs being offered to bargaining unit employees; and

(b) provide an interim joint report to Council, through the Corporate Services Committee, in September 1998, on the status of the Voluntary Separation Program; and

(7) the Executive Director of Human Resources be requested to submit a report to the Corporate Services Committee on developing options related to a 'no layoff' policy.")

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the joint confidential report (March 25, 1998) from the Executive Director of Human Resources and the Chief Financial Officer and Treasurer, respecting a voluntary separation program for bargaining unit employees, which was forwarded to Members of Council under confidential cover.

The Strategic Policies and Priorities Committee submits the following communication (April 2, 1998) from Mr. Denis Casey, Acting President, Canadian Union of Public Employees, Local 79:

This report, which is being discussed in camera, outlines the separation package for unionized employees. Under this program, employees working in areas targeted for downsizing can "volunteer" to take a separation package.

CUPE Local 79 has always supported the concept of voluntary exit packages because they enable some employees to pursue new ventures while opening up opportunities for others who remain with the Corporation. However, it is our view that all employees should be eligible for the program, not just those in specific areas.

We are concerned about the differences between the voluntary exit package offered to management and that proposed for unionized staff. The packages are "voluntary" for both union and management and the urgency to reduce staffing levels is similar for both groups. Therefore, it makes no sense to offer management a package which is better -- and richer -- than the unionized employees' package. In light of the higher salaries paid to management, it would not appear to be financially prudent either.

(a) Management will receive transition allowances which include outplacement services, tuition assistance and career transition services. Union members do not. Surely their need for these valuable services is equally valid.

(b) Management will receive a lump sum payment of up to $3,000.00. Union members will receive a maximum of $2,000.00

(c) Management will receive four weeks of salary for every year of employment. Union staff will receive three weeks of salary per year.

Another important part of restructuring is an improved retirement package for those who are presently qualified to retire. For those who may not yet qualify for the early retirement program, the Corporation should offer the OMERS Type 7 program and other related OMERS programs.

There are employees who are considering the pursuit of other ventures but they are awaiting a fair and equitable proposal which recognizes their dedication to the Corporation.

The City has made a commitment to treat all employees "humanely, equitably and with dignity". We urge Committee members to amend the Separation Program for Bargaining Unit Employees and make it the same as that offered to management staff.

(City Council on April 16, 28 and May 1, 1998, had before it, during consideration of the foregoing Clause, a confidential joint report (March 25, 1998) from the Executive Director of Human Resources, the Chief Financial Officer and Treasurer, and the Chief Administrative Officer, recommending that:

(1) Council adopt the Separation Program for Bargaining Unit Employees;

(2) this program replace all separation or exit programs, policies and practices in the former municipalities;

(3) all bargaining unit employees of the (new) City of Toronto be advised that separation or exit programs, policies and practices which may have been in place in the former municipalities are no longer in force;

(4) the previously established Reserve for Workforce Reduction initially accommodate the funding of this strategy; and

(5) the Chief Administrative Officer, Chief Financial Officer and Treasurer, and the Executive Director of Human Resources be authorized to take all the necessary steps to implement these actions as part of the Workforce Reduction Strategy.)

(Councillor Ashton, at the meeting of City Council on April 16 and the Special Meeting of City Council on April 28 and May 1, 1998, declared his interest in the foregoing Clause, in that his wife is employed by the City of Toronto.)

(City Council, at its Special Meeting on April 28 and May 1, 1998, amended this Clause by adding thereto the following:

"It is further recommended that:

(1) the Toronto Transit Commission be requested to participate fully in the negotiations respecting the accord; and

(2) the matter of the Malton Bus be resolved through this process.")

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the following joint report (March 27, 1998) from the Commissioner of Urban Planning and Development and the Chief Administrative Officer, subject to adding a Recommendation (4) as follows:

"(4) the working group obtain public input and hold public meetings."

The Strategic Policies and Priorities Committee submits the following joint report (March 27, 1998) from the Commissioner of Urban Planning and Development Services and the Chief Administrative Officer:

Purpose:

Seek Council's endorsement to negotiate with the Greater Toronto Airports Authority (GTAA) on an accord on matters of mutual interest with respect to Lester B. Pearson International Airport (LBPIA).

Funding Sources, Financial Implications and Impact Statement:

There are no immediate financial impacts, other than staff resources required to support negotiation process.

Recommendations:

It is recommended that:

(1) the City of Toronto endorse, in principle, the establishment of an accord on matters of mutual interest with the GTAA with respect to LBPIA;

(2) the Chief Administrative Officer to lead the City's participation to negotiate a draft accord to be recommended to Council, and staff be authorized to participate in a working group to identify, negotiate and resolve issues on matters of mutual interest to both parties; and

(3) the appropriate City staff be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

On March 23, 1998, one of the City of Toronto's representatives on the Board of the GTAA, Mr. Gerry Meinzer, appeared before the Urban Environment and Development Committee updating the Committee and Council on LBPIA.

On March 4, 1998 the Striking Committee recommended the following appointments: to the GTAA Noise Management Committee, Councillors LiPreti and Sinclair, and to the GTAA Consultative Committee, Councillors Brown, Holyday and Sinclair.

The attached appendix provides an overview of the GTAA and LBPIA.

Comments and/or Discussion and/or Justification:

(a) Rationale:

The Ground Lease between the GTAA and the Government of Canada provides that the GTAA and the City of Toronto shall enter into good faith discussions with a view towards concluding an agreement which addresses matters of mutual interest concerning the development of LBPIA.

Such an accord has been struck between the GTAA and the City of Brampton (August 1997) and discussions are underway between the City of Mississauga and the GTAA on this subject.

Prior to amalgamation, the City of Etobicoke was approached by the GTAA on this matter. It was not dealt with by Council or the City Manager pending amalgamation.

(b) Intent:

The intent of structuring an accord is to clarify the relationships, structures, responsibilities and authorities, financial obligations and planning processes that will guide the development of LBPIA over the medium term (4-5 years). It will also outline a mechanism by which disputes will be resolved between the two parties if such should arise.

(c) Proposed Process:

Given the scope of the issues to be covered in an accord, it is recommended that a staff working group be structured to assist in meeting with representatives of the GTAA, defining the issues, undertaking necessary due diligence and making recommendations to the CAO as part of the negotiation process.

Staff for this working group would be drawn from Economic Development, Urban Planning and Development Services, Transportation, Emergency and Protective Services, Finance, Legal, and the Offices of the Mayor and the Chief Administrators Office. The process would also seek the input from the Etobicoke Community Council and City Councillors on both the GTAA Community Consultative Committee and the GTAA Noise Management Committee. The composition of the staff team will be confirmed by the CAO.

The Accord will be approved through Strategic Policies and Priorities Committee to Council prior to being executed and progress reports will be provided to Council as necessary. If through the process being recommended, it is determined that the structuring of an accord with the GTAA would not be in the best interests of the City, or should issues arise which cannot be resolved within a reasonable time frame, Council may elect not to execute an accord with the GTAA or may elect to structure an agreement which is broad in scope.

(d) Timing:

While the time frame for the negotiation of an accord was deemed to be May 2, 1998 per the Ground Lease, an extension of 120 days has been agreed to by the GTAA with an option to extend this term if such is found to be required.

Conclusions:

Lester B. Pearson International Airport is a strategic component of the urban and economic structure in Toronto and the whole of Southern Ontario. It provides significant economic benefits, both in terms of employment and in its role as the principal international air gateway for Canada. Through the process of structuring an accord between the city and the GTAA, it is hoped that we will be in a better position to jointly maximize the potential of the airport for the benefit of the Toronto region.

The structuring of an accord between the City of Toronto and the GTAA will serve to create a higher level of understanding between both parties and will clarify the relationships, structures, responsibilities and authorities, financial obligations and planning processes that will guide the development of LBPIA over the medium term (4-5 years), a very critical time given the airport expansion plans which are now underway.

If, through the proposed process, it is determined that the structuring of an accord with the GTAA would not be in the best interests of the City, or should issues arise which cannot be resolved within a reasonable time frame, Council may elect not to execute an accord with the GTAA.

Contact Name:

Christine Raissis, Economic Development, 392-3385.

Anna Pace, Urban Planning and Development Services, 392-8117.

(1) Structure of the GTAA:

The Greater Toronto Airports Authority (GTAA) was established in March 1993 as a community initiative led by the Regional Municipalities with the local Boards of Trade and Chambers of Commerce throughout the GTA. Under Canada's National Airports Policy, the GTAA was reconstituted in accordance with Canadian Airport Authority guidelines and recognized by the Minister of Transport in November 1994 as the CAA for the transfer of Lester B. Pearson International Airport (LBPIA).

The GTAA is a private, non-profit corporation with a mandate to manage and operate LBPIA within a regional system of airports to enhance regional economic growth and development. The GTAA assumed the management, operation and maintenance of Lester B. Pearson International Airport (LBPIA) on December 2, 1996.

The GTAA is governed by a fifteen member Board of Directors comprised of nominees from the City of Toronto, four regional municipalities, the Province of Ontario and the Federal Government. According to the by-laws of the GTAA, the City of Toronto appoints three (3) directors to the Board, each for a three-year term. One of these representatives is a nominee of the Board of Trade of Metropolitan Toronto (Mr. Gerry Meinzer), one is a nominee of Council (Dr. Robert Bandeen) and the third nominee represents the interests of labour (Ms. Sharon Moss). The latter two positions are up for renomination on May 12, 1998.

(2) Background on the Transfer of LBPIA to the GTAA:

The transfer of LBPIA is effected by a Ground Lease which governs the relationship between the GTAA, as tenant, and Transport Canada, as landlord for a period of sixty years, subject to one renewal term of 20 years. The Ground Lease determines the rent to be paid, the scope of authority of the GTAA in managing the operation of the airport and allocates the risks and responsibilities between the GTAA and the Federal Government for all matters covering the operation of LBPIA.

The GTAA leases the lands, buildings and fixtures which comprise LBPIA from Transport Canada and assumes all existing leases, licenses, contracts and other agreements between Transport Canada and companies operating at LBPIA which were in existence prior to the transfer.

The GTAA has the right to determine and collect landing fees from airlines, rent space to concessionaires and other commercial operators, issue permits to taxi and limousine operators, construct and develop the infrastructure of LBPIA and pledge its leasehold interest in LBPIA as security for loans to do so. In return for the right to manage LBPIA and to collect revenues, the GTAA pays a monthly rent to the Federal Government.

The GTAA offered employment to all Transport Canada employees at LBPIA on the same terms and conditions they had with Transport Canada. Ninety four percent, or 504 of 534 eligible employees, transferred to the new organization. The GTAA has assumed the obligations of Transport Canada and will honour and be bound by all existing collective agreements governing the unionized employees at LBPIA.

(3) Airport Development:

The Airports existing terminal facilities have a handling capacity of approximately 28 million annual passengers. It is estimated that this annual practical capacity threshold will be met in the 2000-2004 time frame. Today, capacity is exceeded in the peak hour and peak season periods at Terminals 1 and 2.

In order to provide sufficient airside, terminal and groundside capacity in the future and to enhance the Airports competitive position as a gateway airport to North America, the GTAA has initiated an Airport Development Program, the phasing of each component to be determined on the basis of demand.

Funding for the Airport is expected to be provided principally through the issuance of debt securities. The GTAA's initial public offering of revenue bonds, which generated $947 million, will be used to pay down debt related to the GTAA's acquisition of Terminal 3 and to begin the development program.

Airside Development:

A new north/south runway and first stage of the dual taxiway project was completed in 1997. The north/south runway will increase efficiency during times when strong crosswinds force aircraft away from the higher capacity east/west runways.

Phase II of the plan calls for the construction of a new east-west parallel runway on the south side of the Airport lands. Site preparation will begin this year with construction to begin in 1999. Longer term plans, after 2010, propose a new east-west runway on the north side of the Airport lands.

Now in the design phase, the GTAA's Infield development Project will see the freight and cargo area, presently situated between Terminals 1 and 3, relocated into the infield.

Terminal Development:

The primary objective of the Terminal Development Project is to replace the capacity-constrained and outdated Terminals 1 and 2 with a single terminal building. The new terminal will be constructed on the site where Terminals 1 and 2 are currently located. The new terminal will include a three-level roadway system and a new multi-level public parking garage. The design will preserve rights of way for future mass transit access to the Airport. Stage 1 of the development.

(4) Transportation/Access:

Transit Improvements:

Improving existing transit services to the airport and protecting for a future rapid transit connection will be critical steps to meeting the groundside travel demands of projected increases in airport use.

The Ministry of Transportation in consultation with Metro Toronto, Peel, Etobicoke, Mississauga and the GTAA has identified a transit corridor that would allow the construction of a transit link between the Georgetown GO transit line to the new terminal at LBPIA. The protection of this corridor will be pursued through amendments to the Official Plans of affected municipalities. The terminal redevelopment plans for Pearson should also include rapid transit corridor protection within the airport which is compatible with the corridor identified by the provincial study. The estimated cost to construct the connection is between Pearson Airport and the Georgetown GO line is between $27 and 30 million depending on the technology used. Construction of the rapid transit connection is dependent on the upgrading of the Georgetown corridor to accommodate all-day GO rail service which was estimated at $135 million. No funding is committed for either proposal.

Road Access:

The new terminal design requires that highway access for air passengers will be via Hwy. 409. The GTAA and the Province have determined that the new terminal will require new ramp connections between Highway 409 and Highway 427. In the west, a new interchange with Hwy 401 will serve the new infield cargo terminal. The cost of these works is estimated at over $60 million but there are no funding commitments. These modifications to the highway system will significantly improve road based access to the airport and complement the terminal redevelopment plans.

(5) Noise Management:

Aircraft operations from LBPIA affect an area which extends beyond the actual geographic boundary of the airport. The GTAA has a Noise Management Policy which outlines its approach to liaising with area residents, managing noise from airport operations, and protecting the airport from incompatible uses, such as residential development, in areas of high noise exposure. The GTAA has two standing committees, a Community Consultative Committee and a Noise Management Committee, the latter which is a vehicle for the community to have input on noise concerns directly to the GTAA.

The noise management policy states that the GTAA will oppose residential development in areas above the 30 NEF noise contour to protect current and future airport operations from incompatible uses. In May 1996 the Federal Government revised its policy regarding residential uses near airports to recommend that residential development not be permitted in areas above 30 NE. In February 1997 the Ontario government adopted a policy to prohibit residential development within the 30 NEF to protect major airports from incompatible development. However, municipalities are not compelled to implement the provincial policy and still have the discretion to approve residential development in areas above 30 NEF.

The Meadowvale area of Mississauga has large amounts of land in areas above 30 NEF designated, but not yet built, for residential uses. The GTAA has opposed further approvals for zoning and plans of subdivision on these lands. Applications to redesignate additional industrial land for residential uses in areas above 30 NEF have been filed and are being considered by the City of Mississauga. Within the City of Toronto there has not been significant development interest in redesignation of industrial lands for residential uses in areas above 30 NEF, however prior to amalgamation, Metro Planning had been directed to prepare an official plan amendment to implement the Provincial policy.

(6) Community Consultation:

The GTAA provides for community consultation though two committees: The Community Consultative Committee (CCC) is the primary vehicle for regular community input and participation in the activities of LBPIA. It meets every second month with the President and CEO of the GTAA as chair of the committee. The Noise Management Committee (NMC) meets bi-monthly, alternating with the CCC. This committee focuses on the management and communication of any noise issues and, as with the CCC, is open to the media and public and offers an opportunity for public deputations.

(7) Traffic Statistics:

Approximately 26 million passengers passed through Pearson Airport in 1997. This represents a 7.8 percent increase over the year previous. This increase was a result of a 13.6 percent increase in transborder traffic, a 5.6 percent increase in domestic traffic and a 3.5 percent increase in international traffic.

(8) Economic Impact:

Using the model developed in a Marketing and Economic Impact Study undertaken for LBPIA in 1995, it is estimated that in 1997 the airport generated $11.5 B billion in business revenue; generated 111,995 jobs and $3.2 billion in wages.

Upon reading the above document, as President of EFRRA, I am concerned negotiations with the GTAA are being entered with little opportunity for input from community organizations. We recognize the importance of Pearson Airport to the economy of Toronto and its neighbouring communities. However, the environment and the health of residents of the western and northern communities within Toronto will be deeply impacted by planned operations and development at Pearson Airport on a daily basis.

In the letter from Mr. Garrett under the heading of 'Timing' is a statement to the effect negotiations with the GTAA were to be completed by May 2, 1998. We favour extending the deadline by at least 120 days to give the Committee an opportunity to obtain a balanced and reasoned position prior to entering negotiations. It is essential that the Committee not allow itself to be pressured into a premature agreement by an artificial deadline declared by the Board of Directors of the GTAA.

To aid the Committee in arriving at a balanced position, copies of the following documents have been included:

(a) The EFRRA presentation to the Miller Commission outlining our concerns and issues;

(b) An EFRRA grant request to the Grants Committee requesting funds for airport noise monitoring;

(Both items (a) & (b) have been unanimously endorsed by the EFRRA Council at a meeting on April 1, 1998).

(c) The High Intensity Runway Operations (HIRO) document as an example of the GTAA implementing an initiative that is contrary to the noise mitigation procedures used by Transport Canada;

(d) An agreement between Transport Canada and the GTAA for allowing the expansion of night time operations and testing of residents' noise tolerance;

(e) A letter from an EFRRA association member to Minister Collenette explaining flaws and the negative impact of such an agreement on residents.

It is the intention of EFRRA to make representations to the following Committees:

Urban Environment & Development;

The Miller Commission;

The Etobicoke Local Council;

And any other committees and municipal organizations as seen as affecting these issues.

EFRRA is an umbrella organization for ratepayer and resident associations from across the district of Etobicoke within the City of Toronto.

(Documents referred to above, submitted by Ms. Sylvia Giovanella, have been forwarded to all Members of Council under separate cover on April 8, 1998, and copies thereof are on file in the office of the City Clerk).

(City Council, at its Special Meeting on April 28 and May 1, 1998, amended this Clause by striking out the recommendation of the Strategic Policies and Priorities Committee and inserting in lieu thereof the following:

"It is recommended that the transmittal letter dated March 26, 1998, from the Assessment and Tax Policy Task Force be received.".)

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation of the Assessment and Tax Policy Task Force embodied in the following transmittal letter (March 26, 1998) from the Assessment and Tax Policy Task Force:

Recommendation:

The Assessment and Tax Policy Task Force on March 23, 1998, recommended to the Strategic Policies and Priorities Committee and Council, that the resolution contained in the communication (March 5, 1998) from the Regional Chairman, The Regional Municipality of Hamilton-Wentworth, be endorsed.

Background:

The Assessment and Tax Policy Task Force had before it a communication (March 5, 1998) from the Regional Chairman, The Regional Municipality of Hamilton-Wentworth, requesting the City of Toronto to endorse a resolution passed by the Regional Council at its special meeting of February 19, 1998, strongly urging the Province of Ontario to:

(i) set a single uniform education tax rate for businesses across the province;

(ii) phase in the decrease to businesses, in the 47 municipalities which have a higher than average tax rate, over a five-year period; and

(iii) provide the funding.

Regional Council at its special meeting of February 19, 1998, endorsed the following resolution adopted by Toronto City Council at its special meeting held on February 12, 1998, respecting "Business Education Tax Rates in Ontario:

"That the Province of Ontario be strongly urged to set a single uniform education tax rate for businesses across the province and they be urged to phase in the decrease to businesses, in the 47 municipalities which have a higher than average tax rate, over a five-year period, and that they provide funding."

Your favourable consideration to this request would be greatly appreciated.

(City Council, at its Special Meeting on April 28 and May 1, 1998, deferred consideration of this Clause to the next regular meeting of Council to be held on May 13, 1998.)

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee:

(1) recommends the adoption of Recommendation (2) embodied in the following transmittal letter (March 26, 1998) from the Assessment and Tax Policy Task Force as follows:

"(2) that the Province of Ontario be requested to:

(a) end the business education tax rate that forces Toronto businesses to pay more education tax than other businesses in Ontario; and

(b) re-evaluate in 1998, commercial and industrial properties, with the idea of having an average of the 1996 and 1998 figures as being the property assessments to be used.";

(2) submits without recommendation, the following Recommendation (1) embodied in the aforementioned transmittal letter to Council:

"(1) that the following resolution be adopted:

WHEREAS there have been problems identified with the methodology utilized by the Province of Ontario in the creation of the new Current Value Assessment (CVA); and

WHEREAS highest and best use is an unfair assessment tool; and

WHEREAS there is insufficient time before the return of the Tax Roles (April 30) to explore meaningful measures for long term solutions to assist those hardest hit by the negative impacts of CVA in the business community; and

WHEREAS it is generally believed that Graduated Commercial Rates would result in an unfair and unworkable tax system;

THEREFORE BE IT RESOLVED that the Province of Ontario be requested to defer implementation of the commercial, industrial, residential and multi-residential components of CVA for at least one year to allow time to explore measures for long term solutions."

The Strategic Policies and Priorities Committee submits the following transmittal letter (March 26, 1998) from the Assessment and Tax Policy Task Force:

Recommendations:

The Assessment and Tax Policy Task Force on March 23, 1998, recommended to the Strategic Policies and Priorities Committee and Council:

(1) that the following resolution be adopted:

Whereas there have been problems identified with the methodology utilized by the Province of Ontario in the creation of the new Current Value Assessment (CVA); and

Whereas highest and best use is an unfair assessment tool; and

Whereas there is insufficient time before the return of the Tax Roles (April 30) to explore meaningful measures for long term solutions to assist those hardest hit by the negative impacts of CVA in the business community; and

Whereas it is generally believed that Graduated Commercial Rates would result in an unfair and unworkable tax system;

Therefore be it resolved that the Province of Ontario be requested to defer implementation of the commercial, industrial, residential and multi-residential components of CVA for at least one year to allow time to explore measures for long term solutions"; and

(2) that the Province of Ontario be requested to:

(i) end the business education tax rate that forces Toronto businesses to pay more education tax than other businesses in Ontario; and

(ii) re-evaluate in 1998, commercial and industrial properties, with the idea of having an average of the 1996 and 1998 figures as being the property assessments to be used.

The Assessment and Tax Policy Task Force reports, for the information of the Strategic Policies and Priorities Committee and Council, having requested the Chief Financial Officer and Treasurer to:

(1) report to the Strategic Policies and Priorities Committee and Council, on the resolution set out in the foregoing recommendation No. (1);

(2) report back to the Assessment and Tax Policy Task Force:

(i) on whether or not the City should examine an assessment system based on the average of a property's 1997 assessment (appropriately normalized), 1988 MVA assessment, and 1996 CVA assessment, and the legislative amendments that would be required to effect such;

(ii) with information as to the number of sales in each category taken into account in establishing assessed values in each category, and also the number of vacancies for commercial and industrial properties during the assessment period;

(iii) on the taxation of golf courses in the City; and

(iv) on whether or not another supplementary tax bill based on 1997 rates can be sent out;

(3) report back to Assessment and Tax Policy Task Force on the idea of City Council requesting the Province to:

(a) implement business reassessment on the basis of value in current use; and

(b) provide City Council with the power to cap total business property tax increases for individual properties; and

(4) work with the Province in detailing the regulations and legislative changes that may be required and report to the Strategic Policies and Priorities Committee and Council on the implementation of the above.

Background:

The Assessment and Tax Policy Task Force on March 23, 1998, had before it communications from the following with respect to the Provincial Property Tax System:

- (March 19, 1998) from Councillor McConnell; and

- (March 23, 1998) from Councillor Bossons.

The Chief Financial Officer and Treasurer gave a slide presentation on her findings with respect to the Commercial Graduated Tax rates, and provided copies of her report titled "1996 CVA City of Toronto Commercial Properties, Graduated Tax Rate Options", as well as a Summary of the Commercial Graduated Tax Rate Scenarios Preliminary Estimates.

Mr. Larry Hummel, Director of Appraisal Services, Property Assessment Division, Ontario Ministry of Finance, gave a slide presentation and provided copies of a document titled "Property Valuation Overview - Ontario Fair Assessment System".

The Task Force on Assessment and Policy has done a great deal to clarify the impact of the provincial government's new tax system.

I have met with business leaders and constituents across my ward and clearly their understanding of the impact of the changes is growing. That is why, on March 12, the business people from the Chinese Chamber of Commerce in my ward marched in the streets to oppose C.V.A.

Several other business associations in Don River will be taking to the streets in the next two weeks. Business leaders in my neighbourhood are very, very angry.

They are angry about all the issues that you and our colleagues have discussed over the last several weeks: punitive education taxes; a commercial property tax class that does not distinguish between a mom and pop corner store and a 50-storey bank tower; and a hastily administered assessment system that is riddled with errors.

The business leaders in Don River are not simply angry at the province's tax system that put them in this mess. They are angry at City Council for not taking a sufficiently clear and strong stand. I believe it is time for Council to take that stand, and that we cannot wait until the next scheduled Council meeting.

I believe that most Councillors agree that there are some steps that we must take to address the most pressing issues. I recommend that the Task Force on Assessment and Tax Policy adopt the attached resolution at their next meeting.

WHEREAS the Ontario Government is the only body that can create meaningful subclasses under the new tax system; and

WHEREAS most of the new tax threatening businesses is composed of the province's education tax levy; and

WHEREAS the province's hastily-implemented system has resulted in confusion, errors and oversights that are significant enough to threaten the survival of some small businesses; and

THEREFORE BE IT RESOLVED:

(1) That the City of Toronto call on the Province of Ontario to create a separate "retail strip" subclass that would allow a separate tax rate for small businesses.

(2) That the City of Toronto call on the Province of Ontario to end the punitive business education tax rate, that forces Toronto businesses to pay more education tax than any other businesses in Ontario.

(3) That the City of Toronto demand a one-year deferral of any implementation of the new tax system, while the errors and problems of the system are resolved.

(4) That these matters be presented to a special meeting of Council to be held prior to the 4th of April, and that this special meeting resolve itself into Committee of the Whole to hear deputations from the public.

It is clear that the effects of reassessment and other provincially mandated business property tax changes will be to destroy many independent small and mid-size businesses in retail strips throughout the New City. Key strategic businesses - particularly in the arts - which attract tourists to Toronto will be devastated.

The provincial Minister of Finance, Mr. Ernie Eves, has made it clear that these effects are as unacceptable to the Province as they are to us. We consequently have an opportunity to work with the Province to re-design the tax changes and their implementation. I believe City Council should agree on a set of principles to govern business property tax reform and on a strategy to implement these principles.

Principles for Business Tax Reform:

(1) Our first priority should be to prevent business closures. No business should face a property tax increase that forces it to shut down.

(2) Business property taxes should be based on businesses' ability to pay taxes out of their current income. Any tax increase based on hypothetical forecast of profits from redevelopment of a property should be postponed until such time as redevelopment actually occurs.

(3) No class of business property should benefit from business tax reform through shifting taxes to other classes.

(4) Within any class of business property, tax changes that may be reversed in a subsequent reassessment should be prevented.

Implementation Strategy:

(1) Staff should be requested to recommend subclasses of commercial and industrial property for which different average property tax rates would be required to raise the same total tax revenue from each class as at present. At a minimum, such subclasses should include:

office buildings

small retail stores

arts-related businesses (galleries, cinemas, theatres, bookstore, etc.)

malls

others, as needed

(2) In analyzing the impact of graduated tax rates within each subclass, staff should examine the equity of such graduation and the potential for tax avoidance (e.g., through creating business condominiums).

(3) City Council should request the Province to implement business assessment within the City of Toronto on the basis of value in current use, as recommended by the Crombie "Who Does What" panel. Recognizing that this will take time to implement, Council's request should be that this be done by the time of the next general reassessment (2001).

(4) In the interim, pending such reassessment, Council should cap any business property tax increase on any individual property at a maximum of 30 percent, phased in over the next three years at 10 percent each year. To do so, Council should request the Province to provide it with the power to effect this and to ensure that this cap applies to the total of education as well as municipal property taxes.

Recommendations:

(1) That City Council adopt the tax reform principles and implementation strategy set out above.

(2) That City Council request the Province (1) to implement business reassessment on the basis of value in current use by the time of the next general reassessment, and (2) provide City Council with the power to cap total business property tax increases for individual properties.

(3) That staff be requested to work with the Province in detailing the regulations and legislative changes that may be required and to report to Council on the implementation of all of the above.

The Strategic Policies and Priorities Committee also submits the following communication (April 7, 1998) from Councillor Duguid:

I understand that the Committee will be considering the above item at 3:00 p.m. this afternoon. Regrettably, due to a previously scheduled commitment, I will be unable to attend and have put my concerns about Recommendation No. 1 of Item 13 in writing for your consideration.

While I recognize the difficult position many members of Committee are in as they consider how CVA impacts on the residents of your respective Wards, I consider it a priority to move forward with residential property tax reform without delay.

Without doubt, the adjustments to CVA will impact negatively on some of the older areas of Toronto. For that reason, I support the proposal of property tax relief for low-income seniors and how-income disabled persons. However, I cannot support any proposal that would delay justice being served on residential property owners who have been paying more than their fair share of property taxes for over a decade.

The increases that property taxpayers in older parts of the City will be experiencing would quite likely pale when compared to the cumulative amount of extra property taxes that those benefiting from CVA have paid in the past.

I would like to advise the Committee of my opposition to a one year delay or any other proposal that would pre-empt those property owners entitled to a decrease from receiving that decrease immediately. These residents have waited as successive provincial governments under intense pressure from the former City of Toronto backed off property tax reform time and time again. In 1992, when Metro Council finally reached a compromise, pressure from the former City of Toronto forced the Provincial Government of the day to back down. As a result, six years later, the property tax inequities still exist.

With each delay, the injustice of our property tax system worsens. I would ask Committee members to remember that justice delayed is justice denied.

While a compromise would have been appropriate and acceptable to my residents six years ago, I believe that after so many years of injustice, they would be fiercely opposed to any delay in receiving fair and equitable treatment.

(City Council on April 16, 28 and May 1, 1998, had before it, during consideration of the foregoing Clause, communications from the following individuals in support of capping the tax increase on residential properties at 2.5 percent, as proposed for commercial and rental properties:

(i) (April 9, 1998) from the President, The South Rosedale Ratepayers' Association;

(ii) (Undated) from Mr. F. Altmann, Toronto;

(iii) (April 16, 1998) from Ms. C. Helmstadter, Toronto; and

(iv) (April 16, 1998) from Ms. J. Puncher, Toronto.)

(City Council also had before it, during consideration of the foregoing Clause, a submission on Current Value Assessment (undated) from Mr. C. Kotoulas, Toronto.)

(City Council, at its Special Meeting on April 28 and May 1, 1998, amended this Clause by striking out the recommendation of the Strategic Policies and Priorities Committee and inserting in lieu thereof the following:

"It is recommended that the Minister of Municipal Affairs and Housing be informed that City Council:

(1) does not support the draft of the proposed new Municipal Act as it does not meet the objectives of the municipalities;

(2) supports the key issues stated by the Association of Municipalities of Ontario, as embodied in its news release dated April 24, 1998; and

(3) wishes to express to the Provincial Government, its disappointment with the new Municipal Act as it has failed miserably in its avowed promise of municipal empowerment.")

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the following joint report (March 31, 1998) from the City Solicitor and the Chief Administrative Officer:

Recommendations:

It is recommended that:

(1) City Council endorse the recommended modifications to the Ministry of Municipal Affairs and Housing's proposed new Municipal Act, which are set out at Appendix "II" to this report; and

(2) this report be forwarded to the Ministry of Municipal Affairs and Housing, for consideration, and circulated to the GTA Mayors and Regional Chairs, other regional governments, and to the Association of Municipalities of Ontario, for information.

Council Reference/Background/History:

On March 10, 1997, the Ministry of Municipal Affairs and Housing released a consultation document setting out a proposed legislative framework for a new Municipal Act. Municipalities were invited to review the document and submit commentary by May 9, 1997. Since very little of the proposed framework had been reduced to statutory language, municipalities, in submitting their comments, also sought the opportunity to review the proposed statute once drafting was complete.

On February 11, 1998, a more substantial consultation document, consisting of a policy outline and a 408 section draft statute, was released. Municipalities have been requested to submit their comments on this version of the document by May 8, 1998. This report summarizes those aspects of the proposed Act which are thought to be significant from the City of Toronto's perspective, and lists at Appendix "II" a series of suggested amendments.

It should be noted at the outset that the document being commented upon is not intended to become the first reading version of the new Act. Discussions are ongoing with Ministry of Municipal Affairs and Housing staff, and recommendations of a technical nature have already been submitted. Likewise, the Ministry may make amendments on its own initiative, having engaged in consultation with affected groups. There will also be companion amendments to other statutes, the details of which have not yet been made available.

Overview:

The Proposed New Municipal Act would be divided into 19 Parts, namely:

Part I General Part XI Tax Collection

Part II Municipal Powers Part XII Sale of Land for Tax Arrears

Part III Business Licensing Part XIII Fees and Charges

Part IV Miscellaneous Powers Part XIV Debt and Investment

Part V Transfer of Powers Part XV Enforcement

Part VI Municipal Restructuring Part XVI Municipal Liability

Part VII Municipal Councils Part XVII Regulations

Part VIII Practices and Procedures Part XVIII Transition

Part IX Financial Administration Part XIX Repeals

Part X Municipal Taxation

As was anticipated in March of last year, the proposed Act will incorporate many of the significant changes made to municipal statutory law in recent years, including recent amendments to the existing Municipal Act made through the enactment of Bills 26 (Savings and Restructuring Act) and 86 (Better Local Government Act), and the `Fair Municipal Finance Acts'. Other statutes which will be incorporated into the new Act include the Community Recreation Centres Act, the Ferries Act, the Municipal Elections Act, the Local Improvement Act, the Municipal Boundary Negotiations Act, the Municipal Interest and Discount Rates Act, the Municipal Tax Sales Act, the Ontario Municipal Support Grants Act, the Public Parks Act, much of the Public Transportation and Highway Improvement Act, the Snow Roads and Fences Act, the Telephone Act, the Regional Municipalities Act, plus numerous statutes or portions thereof which pertain to specific municipalities and regions.

Attached at Appendix "I" to this report is a point-form summary of many of the significant aspects of the proposed legislation from the perspective of a single-tier municipality such as the City of Toronto. For the most-part, the summary is restricted to new features and does not speak to the most recent amendments to the existing Act.

Municipal Forms, Responsibilities:

The proposed Act substitutes "lower-tier municipality", "upper-tier municipality" and "single-tier municipality" for the current method of categorizing regional municipalities, cities, towns, counties, etc., although municipalities will have discretion in how they describe themselves. The City of Toronto would be considered a single-tier municipality, and as such would be entitled to exercise all of the general municipal powers which the Act provides. In the case of other municipalities, the proposed Act would allocate powers amongst lower and upper tiers, and provide for a mechanism to transfer most of those powers. Municipal restructuring, and the allocation and transfer of powers, is beyond the scope of this report.

The proposed Act will provide that councils will have broad discretion to determine their own procedures and arrangements. Municipal councils would therefore have broad discretion to arrange their committee structures and configure their procedural by-laws. Many of the current statutory notice provisions will be removed from the Act and replaced with a requirement that councils establish and adhere to policies governing how they will consult with the public, and in what manner council will give notice to the public concerning the various matters which come before it.

The proposed Act, however, will not empower municipalities to establish new bodies corporate such as local boards.

With the exception of the Clerk and Treasurer, the new Act will not mandate particular municipal staff positions, but will set out the administrative duties and responsibilities of the municipality (as outlined above). This would leave a council with broad authority to determine what staff positions it requires and to appoint such staff.

Municipal Powers:

The proposed Act will be less prescriptive than the current Act. Whereas the current Act confers specific authority for each power to be exercised by a municipality, much of the proposed Act would take the reverse approach and grant broad powers to municipalities, subject to limitations which would be imposed by statute, regulation, or other 'enactments' (a discussion concerning which appears below). Municipalities, however, would enjoy this broad grant of power for the most-part only within 13 enumerated spheres of jurisdiction:

(a) health, safety, protection and well-being of people and the protection of property;

(b) public utilities;

(c) waste management;

(d) public highways, including parking and traffic on highways;

(e) transportation systems other than public highways;

(f) natural environment;

(g) culture, parks, recreation, and heritage;

(h) economic development;

(i) nuisances, noise, odour, vibration illumination and dust;

(j) drainage, and flood control, except storm sewers;

(k) structures, including fences and signs;

(l) parking, except on public highways; and

(m) animals.

Within each of these areas, or with respect to any authority conferred by another statute, municipalities would have the powers of a 'natural person', and certain 'governmental powers'.

'Natural person' powers amount, essentially, to the powers of a business corporation. These include the ability to enter into contracts; purchase, own and dispose of property; hire, pay and dismiss employees; delegate administrative responsibilities; provide and charge for goods and services; and sell or otherwise dispose of assets.

Since natural persons do not have the power to direct the activities of other persons, municipalities would be given certain 'governmental powers' to be applied to matters under their jurisdiction, which would include the power to:

(a) regulate or prohibit, and provide for a system of licenses, permits, approvals or registrations, and to deal differently with different classes of persons, businesses, activities, services, things or geographic areas;

(b) make grants or loans (however bonusing restrictions will continue);

(c) impose fees and charges, and levy taxes (subject to current restrictions) ;

(d) enforce by-laws, create offences, apply for injunctions, and impose fines;

(e) expropriate;

(f) without court order, enter lands or buildings which are not dwellings, for the purpose of inspecting compliance with law;

(g) enter private lands for certain specific purposes, such as erecting snow fences; and

(h) licence businesses similarly to the manner provided for in the current Act.

The powers (and duties) related to the financial aspects of municipal government will be described in much greater detail than the powers associated with the general areas of authority.

Restrictions upon Municipal Powers:

The proposed Act will impose certain restrictions on the exercise of both natural person powers and governmental powers within certain named areas of authority. For example, no municipality would be able to regulate another person's (i.e. private sector or another municipality's) facilities by exercising a power within the 'public utilities', 'waste management', or 'transportation systems other than public highways' areas of authority, (although a municipality would still be able to regulate by exercising a power under another area of authority or express provision - unless in doing so it creates a conflict with a power of another jurisdiction).

Unless specifically authorized, a municipality will not be permitted to incorporate a corporation, acquire an interest in a security of a corporation, become bankrupt or make an assignment or proposal as an insolvent person. The Act will not permit municipalities to use natural person powers to impose fees and charges, however that authority is both provided and circumscribed by other provisions of the Act.

The proposed Act will reserve to the Lieutenant Governor in Council a very broad power to pass regulations to restrict the authority of municipalities to pass by-laws, and specifically to pass by-laws which are in the opinion of the Lieutenant Governor "unnecessary" or which "represent duplication", or to restrict a municipality's ability to engage in commercial (which is undefined) activity, especially commercial activity which in the opinion of the Lieutenant Governor represents 'inappropriate competition with private commercial activities'. A statutory amendment would be required to maintain such a restriction for a period longer than three years from the effective date of the regulation.

Interpretation:

Direction will be given to interpret the municipal powers conferred by the proposed Act broadly, so as to:

(a) enable municipalities to govern their affairs as they consider appropriate;

(b) enhance their ability to respond to municipal issues; and

(c) in the event of ambiguity, include, rather than exclude, municipal powers that existed on the day before the new powers became available to municipalities.

The draft statutory language does not direct that municipal powers granted by other statutes (and not falling within the 13 areas of responsibility) be interpreted in the same broad manner.

Municipal by-laws will be subordinate to enactments (including regulations) made by the provincial or federal governments. Indeed municipal authority will be subordinate to any instrument of a legislative nature, which will include any order, licence or approval made under a provincial or federal statute or regulation. Furthermore, except with respect to by-laws:

(a) prohibiting or regulating with respect to systems and facilities owned or operated by or on behalf of the municipality;

(b) licensing businesses (except perhaps with respect to conditions imposed on businesses through such by-laws);

(c) specifically authorized by provincial regulation (including special legislation),

where a matter is subject to provincial regulation (including orders, approvals or licences), a municipal licensing by-law or one supported by a sphere of jurisdiction is without effect to the extent that it prohibits or regulates the matter in substantially the same way as or in a more restrictive way than the provincial regulation. Municipalities are also to be specifically prohibited from passing by-laws respecting human rights, workplace health and safety, employer/employee relationships, and welfare/social assistance programs that are cost-shared with the Province. Having said this, where municipalities currently have by-laws in place that could conflict with any of the afore-mentioned provisions, the proposed Act provides that such by-laws will continue in force until repealed or until the new Act has been in place for three years.

Unless assigned (by specific reference in a table forming part of the statute) to an upper-tier municipality, lower-tier and all single-tier municipalities will have power to enact by-laws in all thirteen areas of responsibility. The table allocates responsibility to upper-tier municipalities either on an exclusive or non-exclusive basis, and is intended to describe the current division of powers in the regions. Should there be a conflict between a lower-tier by-law and a by-law enacted by an upper-tier pursuant to an assigned area of responsibility, the by-law of the upper-tier will prevail to the extent of the conflict. Special provisions will be provided where other statutes confer authority directly upon upper-tier municipalities.

Conclusion:

The proposed new Municipal Act appears to represent the reenactment of existing Municipal Act powers, albeit with certain clear advantages for municipalities. Gone are some of the more cumbersome aspects of the existing Municipal Act. New worries emerge, however, especially with respect to the ability of the province to enact restrictive regulations, or assert its superiority through even minor enactments such as orders or approvals.

The proposed new Municipal Act does not represent a bold step in municipal empowerment. Uncertainty abounds with respect to how the new provisions will be interpreted by the courts, and whether there will be a propensity on the part of senior governments to restrict municipal powers through the use of statutory amendment, regulations, or minor enactments.

Discussions are continuing with staff at the Ministry of Municipal Affairs and Housing with respect to technical issues arising from the draft. Significant policy changes which might be adverse to the interests of the City have been identified in this report, and in that respect a number of suggested amendments to the proposal have been set out at Appendix "II". It is recommended that the suggested amendments be endorsed by City Council, and that this report be forwarded to the Minister of Municipal Affairs and Housing. It is also recommended that a copy of this report be forwarded to the GTA Mayors and Regional Chairs, and to the Association of Municipalities of Ontario, for information

The Chief Administrative Officer has been consulted in the preparation of this report and concurs in the recommendations and suggested amendments.

Contact Name and Telephone Number:

Jeffrey A. Abrams, 392-8530.

Mary Ellen Bench, 392-7245.

The Proposed new Municipal Act introduces a number of changes from the current Act. Although it is not possible to highlight every change, the following is a list of what are considered to be the most significant changes from the perspective of a single-tier municipality such as the City of Toronto. Items marked with an asterisk (*) have companion recommendations set out at Appendix "II" to this report.

General:

The proposed Act will distinguish the responsibilities of council from those of municipal staff:

Responsibilities of Council:

(i) representing the public and considering the well-being and interests of the municipality,

(ii) developing and evaluating the municipality's policies and programs,

(iii) determining the services the municipality should provide

(iv) ensuring that there are administrative practices and procedures in place to implement council's decisions effectively,

(vi) maintaining the municipality's financial integrity, and

(vii) carrying out other duties set out in legislation.

Responsibilities of Head of Council:

(i) presiding over council meetings;

(ii) representing council at official functions; and

(iii) carrying out other duties assigned by legislation.

Responsibilities of Staff:

(i) implementing council's decisions and establishing administrative practices and procedures to carry out council's decisions;

(ii) undertaking research and providing advice to council on the policies and programs of the municipality; and

(iii) carrying out other duties set out in legislation or assigned by council.

It is interesting to note that with respect to the role of the head of council especially, there is a distinct change from the current Act, which reads:

"It is the duty of the head of the council,

(a) to be vigilant and active in causing the laws for the government of the municipality to be duly executed and obeyed;

(b) to oversee the conduct of all subordinate officers in the government of it and, as far as practicable, cause all negligence, carelessness and violation of duty to be prosecuted and punished; and

(c) to communicate to the council from time to time such information and recommend to it such measures as may tend to the improvement of the finances, health, security, cleanliness, comfort and ornament of the municipality."

By-laws which no longer are authorized by Municipal Act provisions will be grand fathered for a three year period, or until repealed, and may not be amended during such period.

Spheres of Jurisdiction:

(i) under the "health, safety, protection and well-being of people and the protection of property" sphere, and under the "nuisance, noise, odour, vibration, illumination and dust" sphere, a matter falls within the sphere so long that it is council's opinion that the sphere applies; and

(ii) municipal powers will be subject to specific enumerated conditions (sections 17 through 142), the conflict provisions of the Act, the Charter of Rights and Freedoms, judicial determinations of bad faith on the part of municipal councils, as well as to the province's own legitimate jurisdiction under the Constitution Act.*

Natural Person Powers:

(i) natural person powers relate to how a municipality may exercise its jurisdiction, not to the extent of such jurisdiction, which is to be derived from either a sphere of authority, or other statutory provision; and

(ii) unless there is a specific statutory provision allowing a municipality to incorporate or acquire an interest in a corporation, impose fees or charges, incur debt or make an investment, provide for pensions, become bankrupt or make an assignment for the benefit of creditors, the municipality cannot undertake such steps, even though a 'natural person' might be able to do so.*

Delegation of Authority:

(i) there is no specific provision enabling municipalities to delegate administrative functions to staff, because that would be considered to be part of a natural person power. Neither is there a specific provision enabling the delegation of non-administrative activity.*

(ii) the proposed Act does not assist in determining the meaning of "administrative", giving rise to potential litigation.

Practices and Procedures:

(i) municipalities will no longer be subject to the cumbersome notice provisions of the existing Act. Instead, there will be mandatory notice (respecting when and in what manner the municipality will give notice of a by-law about to be, or having been, enacted) and consultation by-laws.

(ii) municipalities will be permitted to hold in-camera meetings for any purpose, provided the purpose is identified in the council's procedural by-law, or meets the criteria set out in subsection 248(8) of the proposed Act (i.e. property or labour matters...).

(iii) municipalities will be required to enact a by-law establishing the organizational structure of the municipality. The proposed Act provides little guidance as to how detailed such a by-law must be, nor in respect of the threshold criteria mandating that such a by-law be amended.

(iv) the proposed Act does not state expressly that all municipalities should be governed by an official plan (the Planning Act states that 'regional' and 'metropolitan' governments must have such a plan, but municipal nomenclature will be changed by the proposed Act).*

(v) the new Act would make applicable to all municipalities what are commonly referred to as the "lame duck" provisions of the current Act, thereby restricting Council's ability after voting day.

Highways:

(i) no longer will municipalities be susceptible to becoming responsible for highways as a result of the expenditure of money or carrying out work on them (former 'statute labour' rule). Highways must be assumed by by-law.

(ii) where a highway is mistakenly constructed on land which is not road allowance, the lands occupied are deemed to be expropriated and the owner is entitled to compensation.

(iii) municipalities will no longer be obliged to rebuild bridges

(iv) cumbersome and expensive alteration and closing by-laws will be replaced with the provisions of the municipality's notice by-law.

(v) the concept of controlled-access highway does not appear explicitly in the proposed Act.

Transit:

(i) Although prohibited under section 20 of the proposed Act from regulating or prohibiting systems owned by or operated by or on behalf of a person other than the municipality by resorting to the "transportation systems other than highways" sphere or jurisdiction, section 99 provides that a local municipality may by by-law provide that no person except the municipality may operate a passenger transportation system within all or part of the municipalities specified. Exempt from such regulation are such things as sightseeing vehicles, school buses, private buses, charters, cabs (which are subject to licensing), railway companies and ferries. Municipal regulation will also not be broad enough to regulate passenger transportation systems which only originate in or terminate in the municipality.

Finance and Taxation:

(i) the proposed Act will permit area rating, a means by which an area which derives an additional benefit not received in other areas of the municipality as a result of being a "special service", is made the subject of a special levy. "Special services" must first be prescribed by the province before they can become the subject of an area rating by-law, unless the by-law is being passed by a restructured municipality (which would include the City of Toronto) with respect to a service which was provided in the year before restructuring within one of the merged areas of the restructured municipality, and continues to be provided in the year after restructuring.

(ii) similarly, a higher tax rate may be levied to deal with an otherwise unfair advantage to the merged area by off-loading liabilities brought into the restructured municipality. Such an increase is permissible for a limit of 7 years after the year of restructuring.

(iii) the area rating power can be restricted, and in any event will be governed, by regulations the form of which are not yet known.

(iv) the provisions of the Fair Municipal Finance Act, 1997, the Fair Municipal Finance Act, 1997 (No. 2) and the Tax Credits to Create Jobs Act, 1997 are carried forward. Continued is the requirement with respect to tax deferrals for low income seniors and persons with disabilities, making it mandatory that municipalities make provision to alleviate financial hardship for these two groups of property owners. The extent of the relief, however, is not prescribed.

(v) the proposed Act will allow municipalities to enter into agreements with taxpayers providing for alternative installment and due dates, such as monthly billing plans, such agreements however, remaining in force until revoked by the taxpayer; the municipality cannot revoke them in the case of default, for example.

(vi) a new provision will enable the Treasurer to direct a tenant of property which is in tax arrears to pay the rent to the Treasurer.

(vii) the language of section 312 of the proposed Act leaves open the potential that the province may direct that the municipality must collect taxes for any body it specifies (as opposed to the typical case where the municipality would impose taxes for itself and its school board(s)). This new provision opens up the potential for the province to levy against the property tax base for its own purposes, or for the Greater Toronto Services Board (if established), or for any other 'body' it specifies.*

(viii) although not yet in the draft legislation, it is understood that the province will be requiring municipalities to pass by-laws which would require landlord and tenant to negotiate the implications of the removal of business tax provisions.

Fees and Charges:

(i) fees and charges must be considered as part of the annual budget process. A fees by-law cannot be amended without a companion amendment to the budget.

(ii) a by-law to impose fees or charges which would raise revenue in excess of full cost recovery must explain why the fee or charge exceeds cost recovery. Although the by-laws are not appealable, such statements could give rise to arguments that a by-law was not enacted in good faith, or was beyond the statutory jurisdiction.

(iii) fees and charges may be imposed for the capital costs (of non-growth related) sewer and water services. Certain fees and charges may by regulation be deemed to be taxes and be subject to an appeal process, thus substituting for the provisions of the Local Improvement Act.

(iv) as with the other powers provided by the proposed Act, the province retains the ability to invoke regulations which would restrict the ability of municipalities to charge fees.*

Business Licensing:

(i) The proposed Act continues recent amendments to the Municipal Act which provided for broad licensing power, and will provide that a municipality having jurisdiction over licensing will be able to regulate any business, whether wholly or partly carried on within the municipality. As usual, there are limitations attached to these broad powers. In this case, the power to license will not be available in respect of:

(a) a manufacturing or an industrial business, except to the extent that it sells its products or raw material by retail;

(b) the sale of goods by wholesale;

(c) the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources;

(d) a courier business wherein parcels and documents are conveyed in vehicles used for hire, other than buses and cabs, nor the vehicles used in such a business

(e) a transportation business wherein property is conveyed in vehicles used for hire, other than buses, cabs and tow trucks;

(f) the operation of a group home; and

(g) the rental of a residential housing unit.

(ii) License fees for each class of business cannot exceed the cost of administering and enforcing the licensing by-law with respect to that class of business.

(iii) Each licencing by-law must contain a statement as to why the municipality is licensing that class of business.

(iv) the Act will provide for a regulation making power which would enable the Minister to exempt any business or class of business from any part of the licensing by-law, and imposing conditions and limits on the power a municipality might have to pass a licensing by-law. The regulation can be retroactive in effect for up to 2 years, and could require the return or special use of fees collected before the regulation was enacted.

(v) The licensing provisions in the proposed Act will apply to any licensing power provided by any statute. To the extent there is a conflict, the least restrictive on the power of the municipality will prevail.

Business Improvement Areas:

(i) the proposed Act will continue many of the current BIA provisions, including the recent Bill 106 amendments. Carried forward is the obligation for landlords to notify their tenants within 14 days of notice given by the municipality that it intends to pass a by-law designating a BIA. Only the landlord, however, will be entitled to object to the by-law. Note that BIA charges are deemed to be taxes, and therefore the landlord may be responsible for their payment if recovery from tenants is unsuccessful.

(ii) even though BIAs establish their own budgets, the proposed Act will enable the municipality to levy higher assessments against parts of the BIA that in Council's opinion derive special benefit from improvements, as well as to establish minimum and maximum charges applicable to BIAs.

(iii) the proposed Act does not provide for the imposition of an interim BIA levy.*

Economic Development:

(i) the existing prohibition against bonusing is continued, however a new exception with respect to community improvement plans under section 28 of the Planning Act is to be introduced.

(ii) the Act would enable a school board to exempt from both school and municipal taxes certain properties designated as school capital facilities, without any consent required so to do on the part of the municipality.*

Tax Sales:

(i) the Municipal Tax Sales Act will be repealed, and its provisions incorporated into the proposed Act.

(ii) municipalities will not be able to write off taxes until they go through an unsuccessful tax sale. Should the tax sale be unsuccessful, the municipality is not obliged to register a vesting certificate. This will avoid the municipality having to become responsible for properties which have been abandoned by owners rather than clean up contamination to provincial standards.

Enforcement:

(i) the new Act would create an offence for any person who might "hinder or obstruct, or attempt to hinder or obstruct, any person exercising a power or performing a duty under this Act or a by-law under this Act."

(ii) the Act would also introduce an ability for the municipality to conduct administrative inspections at any reasonable time to inspect land and structures to determine whether its by-laws made pursuant to Municipal Act powers were being complied with. The provision does not extend to by-laws which are authorized by other Acts, such as the Planning Act. The right to enter a dwelling unit is subject to a number of conditions, one of which is that the delay necessary to obtain a warrant or the consent of the occupier of the dwelling unit would result in an immediate danger to the health or safety of any person.

1. The proposed Act will confer the power to enact by-laws within the 13 areas of authority assigned by the Act. It is submitted that municipal authority is often exercised without the need for the enactment of a by-law, especially where administrative powers have been delegated to staff, or in the case of operating and policy decisions made by a local board in respect of matters within its jurisdiction. The Act should be modified so as to clarify that the 13 areas of authority describe the subject matter within which municipalities may carry out their natural person and governmental powers (in addition to the powers provided by other statutes), and not merely the areas within which they may pass by-laws.

It is recommended that the proposed Municipal Act, in assigning powers within the 13 prescribed areas of authority, not restrict the exercise of such powers to the enactment of by-laws.

2. The interpretation section of the proposed Act is drafted in such a way as to instruct the courts to interpret any ambiguity arising out of the provisions which introduce the powers of a natural person, and allocate the 13 areas of authority, in a manner so as to confer broad authority on municipalities. It is submitted that in order to give the interpretation section its intended effect, the Act should contain the simple statement that all municipal powers should be interpreted broadly.

It is recommended that the proposed interpretation provision be modified so as to provide that municipal powers, whether they be derived from the new Municipal Act or any other statute, be interpreted broadly so as to:

(i) enable municipalities to govern their affairs as they consider appropriate,

(ii) enhance their ability to respond to municipal issues, and

(iii) include, rather than exclude, municipal powers that existed on the day before the coming into force of the new Act.

3. The proposed Act does not repeat the current requirement for certain municipalities to have an official plan.

It is recommended that the new Act contain a provision making it a requirement that at a minimum all single- and upper-tier municipalities maintain official plans.

4. Section 20 of the proposed Act would restrict municipal authority in certain areas (for example, it could limit municipal ability to prevent third-party collection of curbside recyclables). The apparent policy behind section 20 is to prevent municipalities from regulating in areas governed by provincial regulation.

It is recommended that section 20 be drafted in such a way as to meet its narrow policy objective without restricting existing municipal powers.

5. One of the stated objectives of the proposed Act is to allow municipalities greater flexibility to deal with local issues. In this regard, municipalities are considering commercial ventures (such as public/private partnerships) with private sector firms to decrease the cost of municipal services, and/or to raise revenues for the municipality. One method favoured by the private sector in organizing such ventures is the establishment of a corporation managed by a board of directors composed of representatives of both the private firm and the municipal corporation. Such corporations provide the advantage of responsive and timely decision making processes, as well as protecting the municipality and the private sector partner in the event of losses arising out of the business venture (limited liability). The proposed Act, however, prohibits municipalities from incorporating companies or owning securities in a company.

It is recommended that municipalities be permitted to incorporate companies or own shares in companies, subject to specific provisions to be established by regulation which would preserve municipal accountability and financial responsibility, such as provisions requiring that:

(i) a certain percentage of shares always be owned by the municipality;

(ii) meetings of the board of directors or any committees of the board be subject to the 'open meeting' provisions of the Municipal Act;

(iii) the articles of incorporation describe the purposes of the corporation, and that the articles cannot be amended without consent of the municipal council;

(iv) the Municipal Freedom of Information and Protection of Privacy Act have (at least limited) application to such corporations;

(v) the municipal auditor have access to the books and records of the corporation, and that such records otherwise comply with the relevant provisions of the Municipal Act;

(vi) municipal assets may not be transferred to the corporation except as permitted by regulation; and

(vii) there be certain statutory clauses to be included in shareholder agreements (such as clauses restricting the transfer and ownership of shares).

6. It is also submitted that in order for municipalities to deal effectively with local issues, they require the ability to delegate certain non-administrative functions to either a committee or a special purpose local board. This would allow a municipal council to distribute its workload in a manageable yet accountable manner. By way of example, municipalities should be permitted to:

(a) consolidate into a new local board existing local boards which carry on similar activities;

(b) establish committees with the authority to hear and determine final appeals from decisions made pursuant to authority delegated to an official (such as permit appeals); or

It is recommended that municipalities be permitted to establish local boards to have certain prescribed responsibilities, subject to criteria to be established by regulation, which might include:

(i) restrictions on the matters for which a local board may be created;

(ii) methods of appointment to the board;

(iii) restrictions on the transfer of assets of the municipality to the board;

(iv) matters pertaining to the financial records of the local board; and

(v) matters pertaining to the conduct of meetings of the local board.

7. The provisions of sections 114-124 of the proposed Act substantially re-state the provisions of the current legislation respecting BIAs, including the changes introduced by the Fair Municipal Finance Act, 1997 (Bill 106) that, in part, deem BIA levies to be a tax and authorize the Minister to establish classes of properties for the purposes of applying the provisions of the Act respecting BIAs. Section 118 authorizes an annual BIA levy, special charges, maximum and minimum charges but is silent respecting the ability of a municipality to impose an interim levy.

It is recommended that the proposed Act provide clear authority for municipalities to impose an interim BIA levy.

8. Section 312 of the proposed Act imposes an obligation on municipalities "required by law to impose a tax for a body" to pay to that body the amount of the taxes collected and, unless otherwise provided any amounts imposed but not collected due to the non-payment of taxes. It is submitted that this provision is extremely broad and has the potential for the province to impose by-law charges against the property tax base for any purpose, and require municipalities to collect such taxes and be responsible for any shortfall in amounts collected.

It is recommended that the proposed Act be amended to restrict the obligation of a municipality to collect taxes levied to municipal and school board purposes, as is currently authorized. If it is intended that this provision open up the door to allow for taxes to be imposed by law for bodies such as the Greater Toronto Services Board, then, at the very least this provision should clearly provide that the property tax base will not be used as a source of revenue to the government of the Province of Ontario.

9. Section 402 of the proposed Act contains broad authority for the Province to restrict the powers of municipalities by regulation, allowing this regulatory power to be applied both retroactively and in a different way against different municipalities. In addition, sections 17 and 18 provide additional restrictions on municipal regulatory powers and provide that municipal by-laws will be subordinate to provincial enactments, defined to include legislation, regulation and orders, approvals and licences. These provisions raise a concern that municipal regulation in almost any area could be challenged on the basis that the province has already occupied the field; the proposed Act fails to draw a clear line between provincial and municipal powers that could result in municipal regulation being struck down as the Province occupies almost every field to one extent or another. Examples of potential conflict include smoking in the workplace, noise, dust or other pollution control, municipal purchasing policies such as fair wage, licensing of special rooming houses, etc.

It is submitted that the regulatory power of the Province provided in the proposed Act is so broad that it should be a sufficient mechanism for the Province to restrict municipal authority where it deems it to be appropriate or necessary. It is submitted that section 17 in particular should be deleted as it causes unnecessary concern that municipal by-laws will be struck down wherever the Province has regulated in the area, even where a field inspector has issued an order or a clerk has issued an approval under a regulation. Additionally, it will be nearly impossible for municipalities to keep track of all orders, licences and approvals issued by provincial staff. One alternative to the proposed section 17 would be to broaden the list of specific areas where municipalities are prohibited from regulating set out in section 18.

In the alternative, it is submitted that at the very least section 17 should be restricted in its application to include only provincial legislation or regulation and not orders, licences or approvals.

(City Council, on April 16, 28 and May 1, 1998, had before it, during consideration of the foregoing Clause, the following communication (April 15, 1998) from Councillor Joan King, Seneca Heights:

The Association of Municipalities of Ontario's (AMO's) Municipal Act Task Force has identified some key issues. As Chair of the Task Force, I am waiting for the technical reviews from several municipal professional associations, namely:

- Municipal Finance Officers' Association;

- Association of Municipal Clerks and Treasurers;

- Regional Solicitors Group; and

- Areas Solicitors Group.

The report from the City's solicitor, Mr. Ozzie Doyle, has been received by the Task Force and will also assist in the final report.

For your information, I am enclosing a copy of the initial "Phase 1 - Key Issues" paper from AMO's Municipal Act Task Force. When the final document is prepared I will make sure you receive a copy. The Task Force members will be meeting with Minister Al Leach.)

(A copy of the Association of Municipalities of Ontario's (AMO's) Municipal Act Task Force Report, entitled "Phase I - Key Issues", referred to in the foregoing communication, is on file in the office of the City Clerk.)

(City Council, at its Special Meeting on April 28 and May 1, 1998, adopted this Clause, without amendment.)

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation of the Budget Committee embodied in the following transmittal letter (April 1, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on March 31, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendations approved by York Community Council at its special meeting held on March 9, 1998.

Background:

The Budget Committee on March 31, 1998, had before it a letter of transmittal (March 13, 1998) from the City Clerk advising that York Community Council on March 9, 1998, adopted the following recommendations:

(a) the Commissioner of Finance be requested to report on the feasibility of sending out a separate property tax notice that clearly indicates to businesses the percentage of the property that is the direct result of the new provincial tax changes;

(b) the Commissioner of Finance be requested to also report on setting a new tax classification for all provincial buildings and land located in the City of Toronto, with the appropriate tax rate set for these properties to reflect the extra charges faced by Toronto businesses as a result of the Education Business Tax; and

(c) public information meetings be held, appropriately advertised in the ridings of every Conservative MPP in the City of Toronto, to inform the public of the impact of the provincial tax changes, and that each MPP be invited to participate in these meetings.

Councillor Frances Nunziata, York Humber, appeared before the Budget Committee in connection with the foregoing matter.

(Transmittal letter dated March 13, 1998, addressed to the

Budget Committee from the

York Community Council)

Recommendations:

The York Community Council on March 9, 1998, recommended to the Budget Committee that:

(1) the Commissioner of Finance be requested to report on the feasibility of sending out a separate property tax notice that clearly indicates to businesses the percentage of the property tax that is the direct result of the new provincial tax changes;

(2) the Commissioner of Finance be requested to also report on setting a new tax classification for all provincial buildings and land located in the City of Toronto, with the appropriate tax rate set for these properties to reflect the extra charges faced by Toronto businesses as a result of the Education Business Tax; and

(3) public information meetings be held, appropriately advertised in the ridings of every Conservative MPP in the City of Toronto, to inform the public of the impact of the provincial tax changes, and that each MPP be invited to participate in these meetings.

The Community Council reports, for the information of the Budget Committee, having:

(i) expressed to City Council its unanimous opposition to the provincial government's changes to the taxation system and the downloading of services to the City of Toronto;

(ii) recommended to City Council the endorsement of the placement of petition forms in all City of Toronto libraries, Civic Centres and City-owned buildings, for members of the public to register their opposition to these changes; and

(iii) invited all the commercial and residential property owners present at the Special Meeting of March 9, 1998, to attend at Metro Hall with their tax bills to voice their concerns to members of Council.

Background:

The York Community Council held a Special Meeting on March 9, 1998, to hear deputations from the public with regard to the increase in assessment for residential, commercial and industrial properties.

The following persons appeared before the Community Council and made submissions in connection with the foregoing matter:

- Mr. Peter Viducis, City of Toronto, Economic Development Division; and made a verbal presentation with respect thereto;

- Mr. Joseph Cordiano, MPP, Lawrence;

- Mr. Gerard Kennedy, MPP, York South;

- Ms. Charlcie Stickley, York Federation of Ratepayers;

- Ms. Marjorie Sutton, Mt. Dennis Ratepayers;

- Mr. Joe Brosky, Roseland Ratepayers;

- Mr. John Kiru, Weston Business Improvement Area;

- Mr. Barry Lowe, Chair, Weston Business Improvement Area;

- Mr. Pat Rocca;

- Mr. George Burgess;

- Mr. Charles Sammut;

- Mr. Gord Burgess;

- Mr. Russ Brown;

- Mr. Sidney Fisher;

- Mr. Karl Stankov;

- Mr. Glenn Webster;

- Mr. Nick Solakos;

- Mr. Steve Tassos;

- Ms. Marie Critchlow;

- Mr. Ray Domian; and

- Mr. Dave Vaughan

(City Council, at its Special Meeting on April 28 and May 1, 1998, amended this Clause:

(1) by inserting the words ", if and as adopted by Council,", after the word "changes" in Recommendation No. (2) of the Assessment and Tax Policy Task Force, embodied in the transmittal letter dated April 6, 1998, from the City Clerk, so that the recommendations of the Assessment and Tax Policy Task Force shall now read as follows:

"(1) That Council request the Government of Ontario and Legislature to hold public hearings on the announced new legislation to address problems with the new Current Value Assessment (CVA) system;

(2) That Council authorize the Chair of the Assessment and Tax Policy Task Force and the Chief Financial Officer and Treasurer to make representations to the Ontario Government and Legislature on recommended changes, if and as adopted by Council, to Provincial legislation and regulations regarding property assessment and property taxes; and

(3) That Council request the Government of Ontario and Legislature to amend the appropriate legislation to establish the preliminary tax rate study as a public record within the meaning of the Municipal Freedom of Information and Protection of Privacy Act.";

(2) to provide that the Chair of the Assessment and Tax Policy Task Force be authorized to include in the presentations to the Province only subject matter that has been duly approved by City Council; and

(3) by adding thereto the following:

"It is further recommended that:

(a) the recommendations of the Assessment and Tax Policy Task Force embodied in the transmittal letter dated April 22, 1998, from the City Clerk, be adopted, viz.:

'(1) That the Province be requested in their drafting of the capping legislation to provide for the re-opening of all leases to ensure that commercial and industrial tenant formerly residentially rated pay their proportionate share of residential taxes under the capping option, the enactment of which would render any rebate program unnecessary during the course of the capping provision;

(2) That the Province be requested to continue to collect and maintain tenant information in the commercial and industrial property classes and to make this information available to the City in 1998 and subsequent assessment rolls; and

(3) That in the interests of administrative efficiencies for the City, and to ensure that the appropriate taxes are billed, the Province be requested to enact new legislation providing for the separate assessment of charitable and similar organizations that are tenants in commercial or industrial properties and authorizing the City to issue tax bills directly to charitable and similar organizations, with ultimate responsibility for payment in the event of default on the owner of the property, the enactment of which would also render the rebate program unnecessary.';

(b) City Council request the Province of Ontario to:

(i) provide municipalities with the authority to create a separate class for the retail, restaurant, retail with residential above and retail with office categories on the Assessment Roll;

(ii) provide in its legislation and regulations for internal apportionments to deliver caps on tax increases due to reassessment in the commercial and industrial categories with particular emphasis on the shopping centre categories on the Assessment Roll; and

(iii) provide in its legislation and regulations for a separate class for heritage lands and buildings on the Assessment Roll;

(c) the report dated April 14, 1998, from the Chief Financial Officer and Treasurer, headed 'Updated Process to Develop Tax Plan', embodying the following recommendations be adopted:

'It is recommended that:

(1) the revised process for the Assessment and Tax Policy Task Force to report to Council on a tax implementation plan, as outlined in this report, be adopted;

(2) that a special meeting of Council be called in June to consider the final tax policy plan for the City; and

(3) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.';

(d) a Working Group on Multi-Unit Residential Taxation, chaired by Councillor McConnell and including any Councillor wishing to serve, and who has constituents who are tenants in multi-unit residential buildings, be established to initiate discussions with organizations that represent Landlords, in order to obtain their support for regulatory changes that would ensure that reductions in multi-unit residential taxes result in benefits to tenants; and

(e) the following motion be referred to the Assessment and Tax Policy Task Force for consideration:

Moved by Councillor Adams:

'It is recommended that City Council endorse the Resolution which was adopted by the GTA Mayors and Regional Chairs at their meeting held on April 17, 1998, as embodied in the communication submitted by Councillor Layton.' " )

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations embodied in the following transmittal letter (April 6, 1998) from the Chair of the Assessment and Tax Policy Task Force:

Recommendations:

On behalf of the members of the Assessment and Tax Policy Task Force who were present on April 6, 1998, I am forwarding the following recommendations to the Strategic Policies and Priorities Committee for consideration:

(1) That Council request the Government of Ontario and Legislature to hold public hearings on the announced new legislation to address problems with the new Current Value Assessment (CVA) system;

(2) That Council authorize the Chair of the Assessment and Tax Policy Task Force and the Chief Financial Officer and Treasurer to make representations to the Ontario Government and Legislature on recommended changes to provincial legislation and regulations regarding property assessment and property taxes; and

(3) That Council request the Government of Ontario and Legislature to amend the appropriate legislation to establish the preliminary tax rate study as a public record within the meaning of the Freedom of Information and Protection of Personal Privacy Act.

Comments:

The Assessment and Tax Policy Task Force, having regard for the fact that no quorum was present at the specified time and in view of the fact that notice had been placed in the newspaper that a public hearing would be held April 6, 1998, on the Property Assessment and Tax Policy System recently implemented by the Provincial Government, heard presentations from the public on this matter.

For the information of the Strategic Policies and Priorities Committee, the members of the Task Force who were present on April 6, 1998, also requested the Chief Financial Officer and Treasurer:

(1) to report directly to Council for its meeting on April 16, 1998, if possible:

(i) on the tax-dollar impact of applying the uniform tax rate for education established by the Province on the preliminary tax rate, including coloured maps, ward by ward for the residential and multi-residential categories of property, based upon assessment portions;

(ii) on the fairness or unfairness of the uniform tax rate for education;

(iii) with new maps, ward by ward, for the residential and multi-residential categories based upon the tax dollar changes, up or down, on assessment portions;

(iv) on a proposal for changes to provincial legislation and regulations to help the City of Toronto deal with the CVA program;

(v) with a summary of the relevant provincial regulations not yet published in any form and those regulations published only in draft form;

(vi) on changes to the overall assessment values by category (residential, multi-residential, commercial, industrial and linear properties) from the 1988 MVA (modified as necessary), the 1997 assessment base, and the 1998 CVA;

(vii) with a revised work plan for setting 1998 tax policies and tax rates in light of the announcement of the Ontario Minister of Finance delaying the process for one month;

(viii) on the cash flow problems caused to the City by the provincial delays in returning the 1998 Tax Roll, including an estimate of the province-wide costs to all municipalities;

(ix) on the evident "softness" of the 1998 Assessment Notices distributed by the Provincial Government and the potential impact on the 1998 tax rates; and

(2) to report directly to Council for its meeting on April 16, 1998, if possible and to the Budget Committee for its meeting on April 20, 1998, on the impact (if any) on the 1998 Operating Budget of the Council's policy choices regarding tax relief for seniors, physically handicapped persons, and businesses in special cases as announced by the Ontario Minister of Finance.

The members of the Task Force who where present also referred the following motions to the Chief Financial Officer and Treasurer for report back to the Task Force:

Motion by Councillor Augimeri

"WHEREAS bank vaults are difficult to remove once they are installed, and increase the value of a property; and

WHEREAS bank vaults in Toronto were, until this year, considered by the Provincial Assessment Office as adding to the value of a commercial property under the assessment rules; and

WHEREAS, for purposes of the 1998 assessment, the Province has decided that bank vaults will no longer be assessed, but rather be considered moveable assets; and

WHEREAS many property owners both residential and commercial will be seeing tax increases this year, and this decision will help to offset the increases to the banks;

THEREFORE BE IT RESOLVED that Chief Financial Officer and Treasurer:

(i) research the new assessment guidelines as they relate to this issue and inform the Assessment and Tax Policy Task Force on the impact of this change;

(ii) research any other significant changes and their potential impacts on the tax base of the City; and

BE IT FURTHER RESOLVED that the City of Toronto request that the Province of Ontario return to the old system of assessment for bank vaults and the vaults of other financial institutions."

Motion by Councillor Kinahan

"(1) That the proposals from the Board of Trade set out in the communication (April 6, 1998) presented by Mr. John Bech-Hansen, be referred to the Chief Financial Officer and Treasurer for report back in due course.

(2) That the Chief Financial Officer and Treasurer report on whether the industrial tax effective rate should be equalized with the commercial tax rate and the time frame for phasing in such."

Motion by Councillor Nunziata

"WHEREAS the business occupancy tax has been removed and an equivalent amount (averaged to 42 percent) added to the property tax; and

WHEREAS in multiple use properties (i.e. malls, office buildings and strip plazas) the tax has been assigned exclusively to the building and land without regard to the individual component business; and

WHEREAS Assessment will no longer be calculated as the total of a number of individually assessed businesses and data for individual businesses will no longer be calculated; and

WHEREAS this data after re-assessment will no longer be available; and

WHEREAS this information is required for many city functions, including economic development and mailing labels for planning notification; and

WHEREAS the proposed cap of 2½ percent will be calculated on the total of the most recent complete data; and

WHEREAS the responsibility for apportioning the tax among the tenants now falls to the landlord; and

WHEREAS there are no specific rules that govern the amount of tax a landlord may assign a commercial tenant;

THEREFORE BE IT RESOLVED that:

(1) the City take whatever steps that may be necessary to preserve the most recent complete data that indicates assessments on individual businesses;

(2) Council request the Province to continue to collect assessment data on this basis and staff report on how the City can replace the loss of this data base and at what cost;

(3) Council request the Province to amend the legislation to specify how landlords of commercial, industrial and multi-residential buildings shall apportion property tax among commercial tenants or the Province continue to provide commercial tenants with direct information about their property tax; and

(4) Council request the Province to amend the legislation to prohibit landlords from adding service charges to tax bills."

The members of the Task Force who were present also referred a communication (April 3, 1998) from Councillor Johnston respecting CVA and other matters to the Chief Financial Officer and Treasurer for report back to the Task Force.

Background:

The members of the Task Force had before them the following communications respecting the property assessment and tax policy system recently implemented by the Provincial Government:

(a) (March 18, 1998) from Mr. Alan Sugarman

(b) (March 16, 1998) from Mr. Jim Campbell, formerly M.T.S.B. Implementation

Co-ordinator, P.E.A.R. Department

(c) (undated) from Mr. Sidney Chelsky, obo Better Business Bureau of Metropolitan Toronto

(d) (April 6, 1998) from Mr. David Hui, Toronto Fair Tax Chinatown Committee addressed to the Minister of Finance

(e) (April 6, 1998) from Mr. John Bech-Hansen, Economist, Toronto Board of Trade

(f) (April 6, 1998) from Mr. Sean Goetz-Gadon, obo Anne Golden, United Way of Greater Toronto

(g) (April 3, 1998) from Councillor Johnston

The following persons addressed the members of the Task Force:

- Mr. Gerald Weiss

- Mr. Sidney Chelsky, obo Better Business Bureau of Metropolitan Toronto

- Mr. Peter Clutterbuck, Community Social Planning Council of Toronto

- Mr. Mario Calla, Executive Director, COSTI

- Ms. Gail McCullough, East York Learning Experience

- Mr. Sean Goetz-Gadon, obo Ms. Anne Golden, United Way of Greater Toronto

- Pat McKendry, Kensington Market Working Group

- Mr. Howard Tessler, Executive Director, Federation of Metro Tenants' Associations

- Mr. John Bech-Hansen, Economist, Toronto Board of Trade

- Ms. Reva Landau

- Mr. Joe Perna

- Mr. Larry Chilton, President, Toronto Rooming House Association

- Mr. David Joy, Annex Property Group

- Mr. Douglas Adamson, obo Ward One Residents for Local Democracy

- Ms. Marilyn Whiddon

- Mr. Jim Stephens

(Copies of the communications referred to in the transmittal letter dated April 6, 1998, from the Assessment and Tax Policy Task Force have been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on April 7, 1998, and copies thereof are also on file in the office of the City Clerk.)

(City Council on April 16, 28 and May 1, 1998, had before it, during consideration of the foregoing Clause, the following report (April 14, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

This report provides an updated process for the development of a tax implementation plan for Council to consider.

Funding:

This report has no direct funding impact. However, the report emphasizes the need for Council to consider a tax plan by no later than mid-June in order to avoid unnecessarily delaying the distribution of tax bills.

Recommendations:

It is recommended that:

(1) the revised process for the Assessment and Tax Policy Task Force to report to Council on a tax implementation plan, as outlined in this report, be adopted;

(2) that a special meeting of Council be called in June to consider the final tax policy plan for the City; and

(3) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference:

At the meeting of the Assessment and Tax Policy Task Force (Task Force) on April 6, 1998, the Chief Financial Officer and Treasurer was requested to report to Council on a revised process to develop a tax implementation plan in light of the recent provincial announcement.

Background:

On March 27, 1998, the Ontario Minister of Finance announced several new tools for municipalities to consider as part of their implementation of the new property assessment and taxation system. In addition, the Finance Minister stated that the return of the assessment roll would be delayed from April 30 to May 29. As a result of the delay, the Task Force's process of proposing a tax implementation plan to Council by mid-May (as adopted by Council on March 4, 5 and 6, 1998) should be reviewed and updated.

Discussion:

The Task Force established a workplan in which it would consider the various components comprising the tax plan (e.g., commercial tax rates, tax rebate for charitable and similar organizations, tax relief for low-income seniors and low-income disabled persons, and a phase-in plan) over the course of the latter half of March and throughout April. The final plan would have been considered by Council at its meeting on May 15, 1998.

In light of the delayed assessment roll, it may be useful to consider a two step approach. First, the Task Force would complete the development of its tax plan for submission to Council, through the Strategic Policies and Priorities Committee, for its meeting on May 15 as initially intended. The Task Force has scheduled three more meetings (April 20 and 27 and May 4) after which it can propose its tax plan. At that time, Council would be requested to approve, in principle only, the conditions of the plan (e.g., tax relief for low-income seniors and the disabled, caps on businesses, and phase-in plans).

The second part of the process would seek Council's full adoption of the tax plan after the final assessment roll is returned and analyzed to confirm the feasibility of the plan. The current analysis is based on preliminary assessment data provided by the Province in early February. Council's consideration of the tax plan based on the final assessment roll would be expected by mid-June and likely require a special meeting of Council because Council meets on June 3 and does not meet again until July 8. Council cannot realistically delay meeting beyond mid-June because this would further delay the issuance of the final tax bills. In addition, the provincial regulations that require municipal councils to adopt transition ratios and tax rates, originally prior to the end of May, will likely be changed to late June.

The two-part plan allows sufficient time for Council to notify the public of the details of the tax plan prior to its formal consideration approximately one month later. The property assessment and taxation reform information and communication strategy adopted by Council on March 4, 5 and 6, 1998, provides funding for advertisements in daily newspapers and for a brochure that would summarize the contents of the tax plan.

Following the adoption of the tax plan, it would be appropriate for staff to continue to further review the assessment data in conjunction with the Province. The review would enable both the City and the Province to conduct more detailed analysis which will provide great value in the preparation of the next reassessment in 2001. Continued detailed review of the assessment base will help determine the appropriate tools which will likely be necessary or additional ones in advance of the reassessment.

Conclusion:

The March 27, 1998, provincial announcement which provides municipalities with new measures to lessen the impact of assessment and taxation reform results in a delay in the return of the final assessment roll. In order to propose a tax plan to Council in a timely manner, a two-step process is recommended to replace the previous approach. The Assessment and Tax Policy Task Force should proceed to recommend the details of the tax plan for Council's approval in mid-May, but in principle only. Council's full adoption of the plan would be subject to its consideration in mid-June of the impact analysis of the plan after the assessment roll is returned. Any further delay in Council's consideration of the plan beyond mid-June will significantly compromise the distribution of tax bills and further delay the collection of tax payments.

Contact:

Ed Zamparo,392-8641

Bill Wong, 392-9148.)

(City Council also had before it, during consideration of the foregoing Clause, the following report (April 16, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

This report provides additional information regarding the impact of using a calculated transitional ratio for the multi-residential properties versus the preliminary transition ratio as directed by the Province.

Recommendation:

It is recommended that this report be received for information.

Comments:

The transition ratios, which determine the municipal tax rate for each property class, were established by the Province to maintain 1997 total tax burdens by class. The Province had released a preliminary method for calculating transition ratios during the summer of 1997. Also, the council can reduce tax burdens for certain property classes, by adopting tax ratios that are closer to the fairness ranges set by the Province.

The transition ratio calculated by the Province for the multi-residential property class is 5.08. Using the method as previously released by the Province, the transition ratio for multi-residential property class was determined to be 3.6758 which reflected the new uniform residential and multi-residential education tax rates. The table below shows the impact on the residential property class if Council wishes to reduce the tax burden for the multi-residential property class, by adopting a tax ratio of 3.6758. The calculation assumes that the tax ratios for the commercial and industrial classes would also be adjusted so that there would be no tax shift onto these classes.

If Council wished to reduce the tax ratio for the multi-residential class from 5.08 to 3.6758, a shift of $101.4 million in municipal taxes from the multi-residential property class to the residential property class would occur. The decrease in total tax burden for multi-residential properties would be 17.64 percent, while the increase in total tax burden for the residential property class would be 6.92 percent. For individual property owners in these classes, the percentage increase or decrease would be over and above any tax change resulting from the implementation of current value assessment. The preliminary tax rate (City & Education) for residential taxpayers would increase from 1.243403 percent to 1.329422 percent, whereas, the preliminary tax rate (City & Education) for multi-residential taxpayers would decrease from 4.438904 percent to 3.65582 percent.

Conclusion :

Council can adopt a lower tax ratio for the multi-residential property class. However, the resulting tax shift would increase municipal taxes for the residential property class by 10.98 percent. Total taxes (municipal and education) for the residential class would increase by 6.92 percent.

Contact Names

Lynne Ashton Bill Wong

Phone: 392-7828 392-9148

Fax: 392-0364 392-3649.)

(City Council also had before it, during consideration of the foregoing Clause, the following report (April 16, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

This report provides a list of all provincial regulations which need to be finalized to execute property tax reform in Ontario.

Recommendation:

It is recommended that this report be received for information.

Comments:

Of the 23 necessary regulations (Appendix 1), the following have been released in draft form:

(1) Classification of real property;

(2) Subclasses of real property;

(3) Other buildings on farm land;

(4) "Heads and Beds" levies (e.g,. hospitals, universities);

(5) Procedure for school support applications;

(6) Conservation land - exemptions; and

(7) Conservation land - current use.

Preliminary information (not draft regulations) have also been received pertaining to:

(1) Transition ratios;

(2) Ranges of fairness;

(3) Gross Receipt Tax rate;

(4) Tax rates for farmland awaiting development;

(5) Uniform residential education rate;

(6) Business education rates; and

(7) Sharing of payments in lieu of taxes between lower and upper tiers.

Contact:

Bill Wong, 392-9148.

Assessment Act

1. Define property classes and subclasses

2. Define conservation land exemption

3. Appeals mechanisms for farmlands, conservation land and managed forests

4. Pipe line rates

5. Define "other" buildings on farm land

6. Farmland awaiting development -- when applicable

7. School support applications

Municipal Act

8. Transition ratios (including method of calculation for municipally restructure areas)

9. Ranges of fairness

10. Rights-of-way rate (municipal and education)

11. Gross Receipt Tax rate

12. Sharing of payments in lieu of taxes (PILs) between lower and upper tiers

13. "Heads and Beds" PIL rate for institutional properties (e.g., hospitals, universities)

14. Prescribing tax rates for farmland awaiting development

Education Act

15. Education exemption for large theatres in Toronto

16. Uniform residential education rate

17. Business education rates

Provincial Land Tax Act

18. Tax rate in school boards in unincorporated territory

19. Defining exempt conservation land

20. Defining farmland and managed forests

21. Establishing appeal procedures for farmlands and managed forests

Local Roads Boards Act, Local Services Boards Act

22. Defining farmlands and managed forests

23. Establishing appeal procedures for farmlands and managed forests.)

(City Council also had before it, during consideration of the foregoing Clause, the following report (April 22, 1998) from the City Clerk:

Recommendation:

The Assessment and Tax Policy Task Force on April 20, 1998, amended Recommendation No. (2) set out in the communication (April 6, 1998) from Councillor Adams, Chair, The Assessment and Tax Policy Task Force, by inserting the words "if and as adopted by Council" after the word "changes", and confirmed the action from its informal meeting held on April 6, 1998, as so amended. The Task Force recommended to City Council the adoption of the recommendations as so amended, which now read as follows:

(1) that Council request the Government of Ontario and Legislature to hold public hearings on the announced new legislation to address problems with the new Current Value Assessment (CVA) system;

(2) that Council authorize the Chair of the Assessment and Tax Policy Task Force and the Chief Financial Officer and Treasurer to make representations to the Ontario Government and Legislature on recommended changes, if and as adopted by Council, to provincial legislation and regulations regarding property assessment and property taxes; and

(3) that Council request the Government of Ontario and Legislature to amend the appropriate legislation to establish the preliminary tax rate study as a public record within the meaning of the Freedom of Information and Protection of Personal Privacy Act.

Comment:

The Assessment and Tax Policy Task Force had before it a communication (April 6, 1998) from Councillor Adams, Chair, Assessment and Tax Policy Tasks Force forwarding the following recommendations, on behalf of the members of the Assessment and Tax Policy Task Force who were present on April 6, 1998, to the Strategic Policies and Priorities Committee for consideration:

(1) that Council request the Government of Ontario and Legislature to hold public hearings on the announced new legislation to address problems with the new Current Value Assessment (CVA) system;

(2) that Council authorize the Chair of the Assessment and Tax Policy Task Force and the Chief Financial Officer and Treasurer to make representations to the Ontario Government and Legislature on recommended changes to provincial legislation and regulations regarding property assessment and property taxes; and

(3) that Council request the Government of Ontario and legislature to amend the appropriate legislation to establish the preliminary tax rate study as a public record within the meaning of the Freedom of Information and Protection of Personal Privacy Act.

The abovementioned communication from Councillor Adams was previously forwarded to City Council for its meeting on April 16, 1998, and appears in Clause No. 25 of Report No. 4 of The Strategic Policies and Priorities Committee.)

(City Council also had before it, during consideration of the foregoing Clause, a copy of the following communication (April 22, 1998) addressed to the Strategic Policies and Priorities Committee and the Budget Committee, from the City Clerk:

Recommendations:

The Assessment and tax Policy Task Force on April 20, 1998, recommended to the Strategic Policies and Priorities Committee and Council that Recommendation No. 1 of the report (April 16, 1998) from the Chief Financial Officer and Treasurer be amended by inserting the words "and industrial" between the words "commercial tenants" and as so amended, the recommendations now reading as follows, be adopted:

(1) that the Province be requested in their drafting of the capping legislation to provide for the re-opening of all leases to ensure that commercial and industrial tenant formerly residentially rated pay their proportionate share of residential taxes under the capping option, the enactment of which would render any rebate program unnecessary during the course of the capping provision;

(2) that the Province be requested to continue to collect and maintain tenant information in the commercial and industrial property classes and to make this information available to the City in 1998 and subsequent assessment rolls; and

(3) that in the interests of administrative efficiencies for the City, and to ensure that the appropriate taxes are billed, the Province be requested to enact new legislation providing for the separate assessment of charitable and similar organizations that are tenants in commercial or industrial properties and authorizing the City to issue tax bills directly to charitable and similar organizations, with ultimate responsibility for payment in the event of default on the owner of the property, the enactment of which would also render the rebate program unnecessary.

The Task Force reports, for the information of the Strategic Policies and Priorities Committee and Council, having taken the following action:

(A) confirmed the action taken at its informal meeting held on April 6, 1998;

(B) urged the Budget Committee to continue to hold the $3.7 million for the rebate program in reserve particularly to address the unfolding situation for Categories 1 and 2;

(C) requested the Chief Financial Officer and Treasurer to undertake an investigation of Categories 1 and 2 organizations in residential and multi-residential areas to assess the impact on them; and

(D) requested the Chief Financial Officer and Treasurer to report on the circumstances as they affect the legions and veterans clubhouses in the new City of Toronto.

Comment:

The Assessment and Tax Policy Task Force had before it a communication (April 8, 1998) from Councillor Adams, Chair, Assessment and Tax Policy Task Force, referring motions, on behalf of the members of the Assessment and Tax Policy Task Force who were present at the informal meeting on April 6, 1998, to the Chief Financial Officer and Treasurer for report to the Task Force.

The Task Force also had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer respecting tax rebates for Charitable and Similar Organizations.

The Task Force also had before it communications from the following:

(a) (March 23, 1998) from Ms. Annie Teremi, Board Member, Corbrook;

(b) (undated) from Mr. James O'Reilly, Karma Co-operative;

(c) (March 19, 1998) from Ms. Barb Matthews, Community development Co-ordinator, Kensington Market Action Committee;

(d) (April 20, 1998) from the Budget Committee.)

(City Council also had before it, during consideration of the foregoing Clause, a copy of a resolution adopted by the GTA Mayors and Regional Chairs at their meeting held on April 17, 1998, and submitted by Councillor Layton, requesting the Province of Ontario to grant municipalities the option to limit property taxation increases to 2.5 percent per year for the next three years on all residential and other property tax classes for those taxation increases imposed as a result of changes to Provincial assessment/tax policy.)

(City Council, at its Special Meeting on April 28 and May 1, 1998, deferred consideration of this Clause to the next regular meeting of Council to be held on May 13, 1998.)

(City Council on April 16, 1998, deferred consideration of this Clause to the Special Meeting of Council to be held on Tuesday, April 28, 1998.)

The Strategic Policies and Priorities Committee submits the following transmittal letter (April 6, 1998) from the Chair of the Assessment and Tax Policy Task Force to City Council, without recommendation:

Recommendation:

On behalf of the members of the Assessment and Tax Policy Task Force who were present on April 6, 1998, I am forwarding, for consideration by the Strategic Policies and Priorities Committee, the report (April 2, 1998) from the Chief Financial Officer and Treasurer respecting the independent review of Provincial Current Value Assessments.

Background:

The Assessment and Tax Policy Task Force, having regard for the fact that no quorum was present at the specified time and in view of the fact that notice had been placed in the newspaper that a public hearing would be held on the Property Assessment and Tax Policy System recently implemented by the Provincial Government, heard presentations from the public on this matter and continued to meet informally and to discuss this and other matters.

The members of the Assessment and Task Policy Task Force who were present had before them a report (April 2, 1998) from the Chief Financial Officer and Treasurer recommending that the Chief Financial Officer and Treasurer not engage a consultant to undertake an independent review of the quality and accuracy of the provincial assessments given that a study based on a statistically valid number of properties could not be completed in a timely manner for Council to consider.

For the information of the Strategic Policies and Priorities Committee, I advise that the Task Force, at its meeting held on March 3, 1998, requested the Chief Financial Officer and Treasurer to conduct an independent audit of the quality of the reassessment that was carried out by the Province.

As Chair of the Assessment and Tax Policy Task Force, I am forwarding the abovementioned report from the Chief Financial Officer and Treasurer, to the Strategic Policies and Priorities Committee for consideration.

Purpose:

This report outlines two approaches to provide Council with an independent review and analysis of the new provincial current value assessments.

Funding Sources, Financial Implications and Impact Statement:

The conduct of an independent review and evaluation of the quality and accuracy of the new provincial current value assessments in Toronto is a detailed and lengthy undertaking, which could conceivably require funding of approximately $1 million.

Recommendation:

It is recommended that the Chief Financial Officer and Treasurer not engage a consultant to undertake an independent review of the quality and accuracy of the provincial assessments given that a study based on a statistically valid number of properties could not be completed in a timely manner for Council to consider.

Council Reference/Background:

The Province notified property owners across Ontario of their new assessments in February. Public reaction to the new assessments in Toronto has been mixed. Some property owners claim the assessments are too high, while others suspect that their assessed values are on the low side. The Ontario Fair Assessment System (OFAS) initially allowed for property owners to appeal their assessments to the Assessment Review Board this year up until June 29. The Minister of Finance announced on March 27 that municipalities will be receiving final assessment rolls one month later (i.e. end of May) to permit municipalities to consider the new tools introduced by the Province. This effectively extends the appeal period to the end of July.

Council amended and approved Clause No. 3 of the Strategic Policies and Priorities Committee Report No. 3 at its meeting on March 4, 5 and 6, 1998, requesting the provincial government to undertake an arm's length review of the quality and accuracy of the current reassessment in Toronto. In addition, Council requested the Province to provide statistical information used to determine the level of quality and accuracy of the provincial assessments as well as other information used to base the assessments. Provincial officials appeared before the Assessment and Tax Policy Task Force at its meeting on March 23, 1998, and presented information outlining the overall quality measures of the new assessments across Ontario. Provincial officials indicated that the new assessments are within the quality standards accepted by the assessment profession. Information pertaining to the statistical quality measures of the multiple regression analysis used to determine the new assessments is to be provided at a later time by provincial officials.

Discussion:

To ensure an independent review of the quality of assessments, the City of Toronto could engage a consultant to conduct a study. In order for the study to provide a meaningful and credible basis upon which to determine the quality and accuracy of the new provincial assessments, there must be a statistically sufficient sample size of properties from all property classes. Normally, a ten per cent. sample is considered adequate. This would imply that approximately 57,000 properties would need to be reviewed. The consultant would compare the new current value assessment of the sampled properties with the estimated sales price (as of June 30, 1998) as determined by the consultant. Statistical measures such as the assessment to sales ratio and others would be calculated to evaluate the results. However, to conduct a study of such a scale would be costly (requiring approximately $1 million) and require several months. This would not provide the Task Force with a study that it could consider within its timeframe of reporting to Council.

Alternatively, the City of Toronto could engage a consultant to undertake a study that is more limited in scope (i.e. not based on a statistically significant sample size) that provides a general indication of the accuracy of the new assessments. This study would be based on a selective sample of properties. This study essentially amounts to a shortened or scaled down version of the more detailed approach and could likely be completed within the Task Force's timeframe and at a significantly lower cost. However, without the statistical rigor of the formal detailed study, the analysis could not be extrapolated across the entire city to make conclusive statements about the quality and accuracy of the assessed values.

Conclusions:

Council requested the Province to conduct an independent review of the quality and accuracy of the new assessments. A study based on a statistically meaningful sample size is a very detailed undertaking requiring a lengthy period of time to conduct. A shortened version of the more detailed study involving a review of a select number of assessments could provide Council with comparisons, albeit on a limited basis, that could offer some insights into the quality and accuracy of the assessments. The limited study, however, would not be of a statistically valid size.

Contact Name:

Ed Zamparo 392-8641.

(City Council on April 16, 28 and May 1, 1998, had before it, during consideration of the foregoing Clause, a communication (April 15, 1998) addressed to Councillor Adams, Chair of the Assessment and Tax Policy Task Force, from Professor John Bossons, University of Toronto, providing comments with respect to the proposal for an independent quality audit of provincial current value assessments in Toronto, and requesting that the issue be referred back to the Assessment and Tax Policy Task Force in order that cheaper and more effective alternatives can be examined.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (April 22, 1998) addressed to Councillor Adams, Chair of the Assessment and Tax Policy Task Force, from the Vice President and General Manager, Central Canada Valuation and Consulting Services, Royal LePage, suggesting that a comprehensive review would require a significant amount of time and resources to review a statistically significant number of properties and that the City may consider a "Limited Scope" analysis to indicate whether a more detailed analysis would be beneficial; and outlining a proposed approach and methodology of such a scope.)

Respectfully submitted,

MEL LASTMAN,

Chair

Toronto, April 7, 1998

(Report No. 4A of The Strategic Policies and Priorities Committee, including additions thereto, was adopted, as amended, by City Council at its Special Meeting on April 28 and May 1, 1998.)

Clause Page

2 Voluntary Separation Program for Bargaining Unit Employees 3312

7 Process to Develop an Agreement on Matters of Mutual Interest
Between the City of Toronto and the Greater Airports Authority

to Lester B. Pearson International Airport 3316

11 Resolution - Business Education Tax Rate in Ontario 3324

12 Provincial Property Tax System 3325

13 Proposed New Municipal Act - Ministry of Municipal Affairs
and Housing Consultation Document 3333

19 Increase in Property Tax Reassessment 3350

25 Property Assessment and Tax Policy System 3352

27 Independent Review of Provincial Current Value Assessments 3369