< Browse more articles
Tax implications still uncertain for landfill property owners

The Ontario government released two regulations last week to overhaul the way landfill properties are assessed and taxed in the province. The regulations do not include the details for capping tax rates or setting tax ratios, but Ontario’s Finance Minister has stated, in a letter to the OWMA on Dec. 13, that he will be making a decision on these issues shortly.

The first regulation, Reg. 449/16, creates a new property tax class for landfills in Ontario that uses the historic valuation methodology to assess these properties as vacant industrial land while including the value of on-site buildings and structures in the assessment based on the cost to replace them. 

However, leachate collection systems and landfill-gas systems, as well as primary and secondary liners, are to be excluded from valuations.

The second regulation, Reg. 448/16, allows for property tax increases to be phased in over the 2017 to 2020 tax years.

The OWMA and its legal advisors have done an initial review of the regulations and are concerned by a number of sections that are either vague or poorly worded. We are actively working with the Ministry of Finance to clarify these sections to avoid any potential confusion between the government and our sector.

In general, the regulations remain consistent with the recommendations made in the Implementation Landfill Assessment Methodology Review prepared by PricewaterhouseCoopers (PwC) in November while leaving the issues of tax capping and tax ratios to be dealt with in the New Year.

Finance Minister Charles Sousa stated in his letter to the OWMA, “Regarding the tax ratio framework for the new landfill property class for the 2017-2020 transition period, I remain committed to announcing my decisions in the near future.”

The OWMA believes that the government will follow the tax-capping recommendations made by PwC in its November report. PwC recommends that the government should limit property tax increases to 5% a year for all landfill sites, except for three properties deemed to be “special cases.” 

As for tax ratios, the report stated the “Province must strike a balance between providing flexibility to municipalities and setting limits to ensure that property tax levels do not adversely impact the competitiveness of businesses that compete with those in other jurisdictions.” The report also clearly articulated that the tax ratios would be established in a manner that prevents double taxation.

Please, let us know if you have any questions or comments on this issue by calling (905) 791-9500.