Finance and Administrative Committee
	TO:	Mayor and Members of Council
	FROM:	Barb Cribbett, Treasurer
	PREPARED BY:	Paul Wealleans, Director, Taxation
	DATE OF MEETING:	2004-Oct-18
	SUBJECT:	Markham Village Business Improvement Area (BIA) Financial Measures

RECOMMENDATION:

THAT the staff report entitled “Markham Village Business Improvement Area (BIA) Financial Measures” be received for information.

PURPOSE:

The purpose of this report is to respond to a request from Council to provide information regarding financial measures that could be implemented to maintain Markham Village BIA as a viable commercial area. The report will address tax-related measures.

EXECUTIVE SUMMARY:

This report notes that, other than a Business Improvement Area levy applied against all commercial properties in the BIA, there are no other property taxation measures that can be implemented to raise revenue to be applied specifically for the BIA properties.

BACKGROUND:

At its meeting of October 12, 2004 (Development Services Committee Report 54, Clause 2) Council, among others, took the following action:

received a deputation by Mr. Sid Ridgley on behalf of the Markham Village Business Improvement Area advising of the position of businesses on Main Street Markham in connection with the proposed big box retail on Highway 48 from 16^th Avenue to Major Mackenzie Drive;

and requested staff to report back to the Finance and Administrative Committee on financial measures that could assist the Markham Business Improvement Area (BIA) in maintaining Markham Main Street as a viable commercial area.

OPTIONS/DISCUSSION:

The ability for a municipality to levy municipal taxes against properties is set out by provincial legislation in the Municipal Act, 2001 and related Ontario Regulations. These levies include annual municipal taxes and supplementary taxes which are levied in order to raise the required annual budgets as approved by municipal Council for municipal services. Municipalities cannot levy a special tax for a specific geographic area for the same services provided to all other property owners in the Town.

There are provisions in the Act that provide for special levies for specific areas but they are financed by a charge against the affected benefiting properties. These include special charges for Local Improvement Areas (LIA) for capital improvements, generally sewer and water improvements. There is also the Business Improvement Area charge. This charge is levied against all commercial properties in a designated BIA boundary. It is based on the approved BIA budget and levied against the assessed value of each commercial property. The allocation of the BIA budget is at the discretion of the BIA board and its members. The boundaries of a BIA can be changed through a notification process with the ability for appeals to be filed.

There are no provisions under the Municipal Act that would permit a municipality to levy a special tax against a specific area other than the LIA or BIA. The boundaries of the Markham Village BIA could be enlarged to include additional properties, however, these property owners would have a right to vote on the BIA budget.

In its budget tabled on May 18, 2004, the Provincial Government announced that it would consult with stakeholders with the view to consider the creation of a small business class.

It is likely that the use of graduated tax rates and optional property classes will be its basis. This could be achieved through the use of graduated tax rates and based on the increasing value of a property, it would be possible to tax a single building at differing tax rates. For example, the initial $100,000 of CVA could be taxed at 1%; the next $100,000 at 2% and any CVA value over $200,000 could be taxed at 3%. The result of this would be that higher valued properties would be taxed at a higher level than lower valued properties.

Additional research and analysis will be needed to determine whether such an approach provides the desired benefit. Consensus on the definition of “small business” for property tax purposes has previously been difficult to reach. Suggestions in the past have included geographic areas (similar to BIAs), a maximum building area as a threshold for eligibility or income revenue. The Province has announced in the budget that it will continue to consult with business and municipal representatives to discuss other options to address taxation for small businesses. However, Town staff have contacted the Ministry and were informed that as yet no consultations have occurred.

FINANCIAL CONSIDERATIONS:

None

BUSINESS UNITS CONSULTED AND AFFECTED:

None

ATTACHMENTS:

None

Paul Wealleans, Director, Taxation

Andy Taylor, Commissioner, Corporate Services

____________________________________

Barbara Cribbett, Treasurer

Q:\Finance and Administration\Finance\SHARED\2004 Finance_Admin Cttee Reports\0469 - Markham Village BIA Financial Measures.doc