As we continue to journey through the 2023 municipal budget year, it is time to update some of the property tax and water rate comparisons I have done over a number of years. This time, I would like to do the comparison for the top 30 municipalities in Ontario by population which essentially amounts to all the cities with over 100,000 people with the exception of Niagara Fall which is almost there at 96,000. These cities together account for 75 percent of Ontario’s population. The data for comparison is from the 2021 BMA Municipal report and two indicators are compared: 1) Annual property taxes for a detached bungalow and 2) Annual residential and Wastewater Costs per 200 cubic meters. While much of the focus in municipal budgets this year is on the rather large increases in the tax levy, it remains that water charges are also another hefty amount on top of property taxes. In all the figures, I also highlight the amounts for Thunder Bay and Sudbury, which are the two northern Ontario members of the top 30.
Figure 1 ranks these municipalities by the property taxes for a detached bungalow in 2021 and they range from highs of $6,643 and $6,500 for Markham and Richmond Hill to lows of $3,444 and $$3,262 for Windsor and Chatham-Kent with an average of $4,323 and a median of $4,049. It should be noted that the top ten property tax amounts are all in the GTA where of course property values are also the highest. Thunder Bay is essentially mid-ranked in this comparison with its property tax figure of $3,955 below both the average and the median. Greater Sudbury, is much lower than Thunder Bay and at $3,453 has the third lowest property taxes for an average detached bungalow in Ontario’s top 30 municipalities.
Figure 2 now does the ranking by residential water and wastewater(sewer) costs per 200 cubic metres of water. The top three are Greater Sudbury, Windsor and Thunder Bay at $1,409, $1,306 and $1,278 respectively. At the bottom are Hamilton, Mississauga and Brampton with Hamilton at $781, and the last two tied at $590. The average was $976 while the median was $929. The two northern Ontario cities both are amongst the highest when it comes to water rates in the province. One suspects that water rates for some of the cities at the bottom are likely to go up substantially in the near future given urban growth and other issues. Hamilton for example, is likely facing some expensive issues with respect to its water infrastructure given recent developments with respect to sewer discharges.
Of course, for the average municipal residential ratepayer, what really matters is the total package when it comes to property taxes and water charges and this is provided in Figure 3 where the two items are summed up and ranked by municipality. When the two totals are summed up they range from highs of $7,537 and $$7,478 for Markham and Richmond Hill to lows of $4,482 and $4,457 for Waterloo and Chatham-Kent. The average is $5,299 and the median is $5,099. At $5,233 Thunder Bay is slightly below average and slightly above the median for the totals of property tax and water rate. However, it does have the 11th highest total coming right after the ten GTA municipalities ahead of it and just before Hamilton. With those types of numbers, when it comes to municipal finance, Thunder Bay is definitely GTA class in terms of property and taxes and water rates. Greater Sudbury on the other hand is in the top of the bottom third with a total of $4,856.
The more interesting question is what the numbers will look like for 2022 once complete as well as where they are going to be headed in 2023. Municipalities have been hit with escalating costs for labour, materials, supplies and energy as well and one can expect that there will be a lot of upward pressure to bring in property tax and water rate increases that reflect the inflation rate. These increases will come at the same time as rising interests will put financial pressure on the mortgages of home owners and the pressure that inflation has been generating on family budgets. Given that in Ontario, municipal elections in October have put in place a council for the next four years, one suspects that most councils will eventually front end fairly large tax increases at the start of their terms and ease off midway through their terms in the run up to the next election. Sad, but very likely to be the outcome in many cities across Ontario. It will be the rare council with the foresight, fortitude and ability to rein in their costs sufficiently to prevent large tax increases this year.
