Ranking Property Tax Burdens in Ontario Cities

A recent set of statistics published on the real estate site Zoocasa has attracted a fair amount of attention in the media and ultimately even in Thunder Bay.  The data for these Ontario municipalities includes the property tax rate, the average value of homes and tax calculations for some standardized home values ranging from $250,000 to $1,000,000 dollars.  The highlight of the data is of a course a ranking of property tax rates across 35 Ontario municipalities and the illustration that property tax rates in Windsor are the highest in the province and those in Toronto are the lowest with Thunder Bay coming in at second highest.

Of course, how you rank these tax burdens – especially when we are discussing property taxes in say Thunder Bay or Sudbury compared to southern Ontario cities – can lead to different answers.  In the end, much depends if you want to rank tax rates, the average taxes paid based on average property values, taxes paid per standardized house values or property taxes as a share of resources available – for example household income.  There are two components to calculating a simple estimate of property taxes paid – the value of the home and the tax rate applied. Using the tax and property value data from Zoocasa and household income data from the BMA 2019 report, here are some of the rankings in visual form.

First, Figure 1 plots average house values ranked from highest to lowest for the 35 Ontario municipalities.  The prices range from a high of $1.08 million dollars in Richmond Hill to a low of just under $189,000 for Sault Ste. Marie.  Not surprisingly, houses in the GTA area have the higher values while the four northern Ontario cities in the data are all at the bottom.  Sharing the bottom with northern Ontario cities are other places that have been relatively economically depressed in recent years – Windsor, London, St. Catharines.   

Policing Resources and Costs in Northern Ontario: A Brief Municipal Comparison

Municipal budget season is upon us and expenditures on protection – police and fire – are some of the most important areas in which municipal tax dollars are spent. Municipal police services have the responsibility of ensuring the security of residents, businesses and visitors to their communities and the basic activities are crime prevention, enforcement of laws, maintaining public order,  assisting the victims of crime as well as emergency services.  Over the years, policing has become more complex dealing with new types of criminal activity in the cyber age as well as devoting more resources to social concerns.

One interesting point of comparison for the five major northern Ontario cities is the number of police officers per 100,000 of population and the trend in this number over time.  Figure 1 plots Statistics Canada data on police officers per 100,000 for the period 2000 to 2016.  In 2000, the largest number of police offers adjusted for population was in Thunder Bay at 171.6, followed by Sault Ste Marie at 156, Timmins at 153.1, North Bay at 147.6 and finally Greater Sudbury at 143.1.  By 2016, Thunder Bay was still first at 199.5 officers per 100,000 of population.  It was followed by Timmins at 196.2, Sault Ste Marie at 176.7, Greater Sudbury at 160.7 and then North Bay at 152.6.   

 

As Figure 2 illustrates, growth in per capita policing numbers was greatest in Timmins at 28 percent, followed by Thunder Bay which saw a 16 percent increases.  Next highest growth was Sault Ste Marie at 13 percent, followed by Greater Sudbury and North Bay at 12 and 3 percent respectively.

 

Another point of comparison is spending. The BMA Municipal Reports provide some data on the costs of providing policing services. The rankings for costs generally parallel those for police numbers. When the net costs per 100,000 dollars of assessment are compared (including amortization), in 2016 the highest cost was in Timmins at $441 per $100,000 of tax assessment followed by Thunder Bay at $434. Next was Sault Ste Marie at $402, then North Bay at $317 and finally Greater Sudbury at $299.  Naturally, this ranking is influenced by the richness of the tax base and all other things given cities with a weaker total tax base can expect costs of policing per $100,000 of assessment to be higher.  At the same time, over the last decade, all five cities have seen a reduction in the net costs pf policing per 100,000 dollars of assessment.  This could be a function of growth in tax bases as well as other efficiencies and economies.

Fire Services in the North: The Case of Sudbury

Sudbury is in a bit of a tizzy over proposed changes to its fire and paramedic services.  The proposed plan will see nine of the current 24 fire halls closed and a move to reduce the number of volunteer firefighters and hire more full time firefighters. The staff report estimates that the full-time compliment would go from 108 to 166 within the next decade, while the volunteer ranks would be almost cut in half from the current staffing level of 350.

Sudbury is a very large and dispersed municipality with the central core area served by full time firefighters and outlying areas served by volunteers who are paid part-time employees. Under the new plan, Sudbury's municipal government maintains that firefighters would be able to reach 90 percent of Greater Sudbury within nine minutes, as opposed to the current 69 percent.  Part of what is planned is an equalization of services to standardize and improve coverage and response times.  However, part of the plan also involves composite stations staffed by both full-time and volunteer firefighters, as well as increases in taxes in the areas currently served by volunteer firefighters.

It is useful to see where Greater Sudbury stands in its fire service costs relative to other cities in Ontario.  Figure 1 uses data from the BMA Management Consulting 2016 Municipal Study to plot the net per capita fire service costs (including amortization of any capital assets) for cities in Ontario with more than 100,000 of population as well as the Northern Ontario Five (N5) – Thunder Bay, Timmins, Sault Ste Marie, North Bay, and Greater Sudbury.  The results show quite a difference in per capita costs ranging from a high of $273 in Thunder Bay to a low of $102 in Milton.  Sudbury’s costs are quite modest coming in at $149 – the lowest among the N5 – and placing 22^nd among the 27 cities in Figure 1. 

Of course, one can understand the concerns of ratepayers in Greater Sudbury that the proposed changes will raise costs and therefore raise taxes. The costs of fire fighting according to the BMA Municipal Study 2016 Report can vary as a result of a number of factors, which include:

1. The nature and extent of fire risks: The type of building construction, i.e. apartment dwellings vs. single-family homes versus institutions such as hospitals

2. Geography: Topography, urban/rural mix, road congestion and fire station locations and travel distances from those stations

3. Fire prevention and education efforts: Enforcement of the fire code, and the presence of working smoke alarms

4. Collective agreements: Differences in what stage of multi‐year agreements municipalities are at and also differences in agreements about how many staff are required on a fire vehicle

5. Staffing model: Full‐time firefighters or composite (full‐time and part‐time)

Costs in the end are an interactive function of the geographic area that must be served as well as the population base in that area that is available to cover the costs as well as its compactness - in other words, population density is a factor.  The importance of population density as a determinant of fire service costs is highlighted in Figure 2, which plots the net costs per capita of Figure 1 against population density (population per square kilometer) and reveals an inverse relationship when a linear regression is fitted to the data.  It of course does not control for any other variables and there is a fair amount of dispersion (the R-squared is also very low) around the fitted relationship but if Sudbury’s population density is plugged into the relationship, all other thing given, the per capita cost of its fire services rise to 181 dollars per capita.  Thus for Sudbury to be at 149 dollars per capita it must mean there are other factors affecting its costs or it is doing something to keep its costs well below – nearly 20 percent below - what is predicted by its population density alone.

It is the volunteer staffing model which has probably been a factor in keeping Sudbury’s fire fighting costs per capita relatively low given the large land area that must be served and the accompanying low population density.  Moving away from this model will probably bring Sudbury’s per capita costs more in line with other major Ontario municipalities.  No wonder ratepayers are upset.  At the same time, making the changes needs to weigh the improvements in service and response time that are expected to emerge against the expected additional costs.  It is an important cost-benefit analysis and should make for an interesting City council meeting in Sudbury on March 21st.

The North and Population Aging

The 2011 Census results for population age are out from Statistics Canada today and Canada is indeed a much older place than the last census in 2006.  The proportion of population aged 65 and over is now 14.8 percent, up from 13.7 percent in 2006.  The results for Northern Ontario suggest that the North is older than Canada as a whole.  A ranking of Canadian CMAs (Census Metropolitan areas) and Northern Ontario CMAs and CAs (Census agglomerations) show the Sault is the oldest major city in the North with 19.3 percent of its population aged 65 years and older.  Thunder Bay is next at 17.2 percent followed by North Bay at 17 percent.  Sudbury is next at 16.1 percent with Timmins the youngest at only 13.8 percent.  For Canada's CMAs as a whole, the oldest is Peterborough at 19.5 percent and the youngest is Calgary at 9.8 percent.  Indeed, Calgary, Edmonton and Saskatoon, out in the booming west with its influx of young migrants - are the three CMAs with the lowest share of population aged 65 and over.  Additional note, I've left Elliot Lake (a northern CA) off of this graph.  Its proportion of population aged 65 and over is 35.1 percent but then it has become a retirement community.