Thunder Bay's Tax Levy Debate

It would appear that the municipal election campaign is starting to heat up with the outgoing Mayor taking issue with the Thunder Bay Chamber of Commerce's recent election policy document which among things argues that the City of Thunder Bay's tax levies have increased by an annual average of 3.36 percent over the last decade.  Their graph is for the period 2012 to 2022 which includes projections for the 2018 to 2022 period which is not exactly the last decade. The Mayor maintains that the average tax levy change over the past eight years is only 2.4 percent - after new growth in the tax base was factored in.

This is all really quite entertaining because what matters is the increase in the total tax levy - that is what is being drawn from the tax base and used to fund spending.  The tax levy is essentially an expenditure estimate for taxpayer assisted spending and in the end what matters is the total amount of the revenue taken in and its growth and not whether some of it comes from the existing base and some of it is coming from new assessment growth.  The latter argument is really only being advanced to deflect attention from the overall increases.


So, what are the numbers?  Well, here is my two cents worth.  The accompanying figure plots the annual tax levy increase for the period 2008 to 2018 based on total tax revenue numbers from the Financial Information Returns from the Ministry of Municipal Affairs and Housing (with the exception of the last couple of years which come from City of Thunder Bay budget documents).  If you take the average, it comes out to comes out to 3.3 percent which is pretty close to the Chamber estimate.  If you take the average for only the 2011 to 2018 period, you get an average of 3.4 percent.  The last four years average out to 3.7 percent which is a rate well in excess of the rates of inflation and income growth in this city but the number is skewed by the 5.7 increase in 2015 - the year right after the last election. In the end, the tax levy in Thunder Bay has increased at an average of over 3 percent annually for the last decade and based on the chamber numbers is projected to continue doing so.