Fillmore's Tax Freeze Doublespeak

Freezing taxes from going up? Or from going down?

Halifax’s election is coming up, and local Liberal MP Andy Fillmore has announced his candidacy. In his announcement speech, Fillmore promised to “freeze the municipal tax rate to reduce your tax burden and keep more money in your pocket”.

That’s the kind of statement that makes sense if you are among the 95% of people who aren’t lame enough to closely track property tax rates. Because, if you look at the property tax rate, it’s been going down - not up.

It all comes back to your property tax bill being determined by a combination of property assessments times the tax rate. Mayor Mike Savage council’s have repeatedly decided - despite the provincial cap holding most assessment increases to inflation - that assessments were rising too much, and they rather cut the rate than use the revenue windfall.

From fiscal year 2012-2013 to 2023-2024 , the combined residential rate has been cut by 9 basis points. That isn’t pocket change. On a $57 billion dollar residential tax base, that’s $51 million per year in foregone revenues. So what is Mr. Fillmore actually committing to? Is he committing to capturing future large assessment increases?

As a supporter of higher property taxes, I’m tempted to cheer this promise. After all, freezing the rate is better than repeated cuts. But I also think we need to speak honestly about the municipality’s budget woes, and this promise seems perfectly crafted to trick people into thinking their tax bills won’t go up. Especially if you aren’t specifying your expectations for the assessment base. What happens when the next budget cycle opens with media articles about a 9% average tax bill increase?

While house prices may have levelled off recently, the taxable assessment base should continue to rise, because of a combination of new homes being added and capped assessments resetting to much higher levels when homes are sold. For example, this year, while most assessments rose at the CPI-capped rate of 3.2%, the total assessed value rose 8.5%. I would expect similar gaps in the coming years.

As a result, each of us is left to interpret this promise, which sounds like tax savings are coming, but literally means - especially for capped homeowners, the end of inflation-adjusted tax cuts that Mayor Savage’s council delivered.

Which is it?