Are low taxes a lifeline for Peel’s most vulnerable or a handout to comfortable homeowners?
The Pointer file photos/Mississauga Food Bank/Chart City of Mississauga

Are low taxes a lifeline for Peel’s most vulnerable or a handout to comfortable homeowners?

The City of Mississauga has packaged its annual financial blueprint for the coming year as a budget for “challenging times”.

It comes as people are struggling with the economic devastation caused by COVID-19, a situation that calls for a special response. In this context, staff have put off projects, including fire and transit, to keep taxes low for residents.

In Brampton, Mayor Patrick Brown has gone further. The former Ontario PC leader is pushing through a third consecutive tax freeze for his city, citing a “very challenging year” for residents.

Those who were already in difficulty before the pandemic have been hit the hardest. The Mississauga Food Bank, for example, saw a 15 percent jump in new visitors, along with a 41 percent increase of unique individuals served.

The Mississauga Food Bank has seen a sharp increase in demand during the pandemic


Food poverty advocates say this will only get worse.

The desperate situation leaves a key question hanging over the budget process: what is the best way to help those who need it most?

“I think that was one of the challenges with the property tax deferral [announced in the spring]: it was a very blunt instrument and everyone got it,” Gary Kent, commissioner of corporate services and chief financial officer, told The Poiner, explaining he was confident Mississauga’s budget was the right balance for council to “consider and debate and approve.” He pointed out a significant portion of social programs are run by either the Region of Peel or the Government of Ontario, with the Region “acting as an agent of the Province.”

“I think we’re doing what we can within the swim lanes that are ours,” he added. “I just hope it is getting to the right people.”

The City’s lane, in terms of designating assistance to reach those in need directly, is narrow; the Region’s is much wider.

Decades of provincial and federal downloading mean the upper tier municipality oversees a series of programs designed to redistribute revenues to lift all boats. The idea behind the social services regional government is responsible for involves investing in human capital to expand the economy for everyone. Housing, child care, public health and accessible transit are just a few of the programs operated by the Region.

Peel’s proposed budget has not yet been released, but councillors representing individual municipalities tend to consider their local finances within the regional picture. Mississauga has paused its budget talks until the New Year, waiting for an understanding of the Peel tax increase before making any final approvals.

The estimated breakdown of the property tax bill for Mississauga’s homeowners and businesses includes the following breakdown: Of every dollar residential property owners pay, 45 cents go to the Region of Peel to support its programs, infrastructure and services; 36 cents go to the City of Mississauga; and 19 cents is for the Province’s education portion which funds public schools and has not been increased in more than a decade. 

Of every dollar commercial property owners in the city pay, 50 cents go to the Province for education; 28 cents go to the region; and 22 cents are for the City of Mississauga’s annual budget.

The distribution of residential and commercial property tax bills in Mississauga


The question of who benefits most and least from low taxes is not particularly difficult to answer. Whereas income taxes are only regressive when those who benefit most from provincial and federal spending do not pay for their fair share, compared to the benefits they accrue due to infrastructure and services covered by all taxpayers, at the local level these benefits and costs linked to property ownership are easier to measure. 

For example, according to research by the online real estate company Zoocasa, in 2020, a Mississauga homeowner whose property has an assessed value of $1 million, would pay $7,860 in total property taxes.

While overall residential property taxes have increased at around the Ontario rate of inflation over the past decade, for a compounded increase of approximately 23 percent, home values based on the market have skyrocketed over the same period.

According to online real estate service, the average sale price for all residential units combined (condos, townhouses, semi-detached homes and single family houses) in November of 2010 was $354,937. In the month just ended, the average sale price for all units in November was $796,860.

So, while property taxes in Mississauga increased by less than 25 percent in a decade, the value of homes went up by 125 percent.

This helps answer the question of who benefits most from lower tax increases. Those whose properties have higher value, get a more disproportionate return on their investment, while the infrastructure and services that make Mississauga a more desirable real estate market are covered more disproportionately by those whose homes have a lower value.

Adding to the regressive nature of property taxes in Peel is a troubling pattern in the way the Region covers its expenses, outside the property tax bill.

A 2010 utility bill of $100, which covers water and wastewater infrastructure and service in Peel, ballooned to $207 in 2020 for the same amount of usage.

This shell game, of separating out these charges from the actual property tax bill, allows the Region to make it look like levies are being kept in line with inflation, when, in fact, they are far outpacing the cost of living. 

The following are the staggering annual percentage increases to the Region of Peel utility bill from 2010 to 2020: 5, 9.1, 6, 7, 7, 7, 9, 5, 6.5, 6.5, 7.2. 

This year’s 7.2 percent utility hike was increased from the originally proposed 6.3 percent for 2020, after Brown pushed his tax freeze for Brampton and Mississauga Ward 7 Councillor Dipika Damerla, who has already accepted the Liberal nomination to run in the 2022 provincial election, made the jaw-dropping election-style suggestion of capping the 2020 Peel Region budget, before any departments had even presented their financial situation. 

The utility rate increases are particularly regressive, as renters (many at the bottom of the socioeconomic ladder) often have to cover these costs, even those who live in houses whose owners get a break, while the most valuable homes again offer their owners a disproportionate advantage through the outsized real estate investment returns.

Instead of reducing property taxes at the Region, dramatic reductions to the utility bill might actually offer a deeper and wider benefit to those who need help most during the pandemic. 

Read more about Peel’s utility rates here


During deliberations last year, when Damerla suggested council prescribe its tax increase before staff even presented departmental budgets, it forced public servants to consider political decisions. The suggestion was never crystalized into a motion, but offered a flavour of how some at the regional table think.

The Pointer reached out to Mississauga councillors to glean their views on the upcoming regional budget and how the issue of tax increases would be handled.

“Generally, I don’t react to temporary situations too dramatically. Bad times don't last, but bad decisions certainly do,” Ward 11 Councillor George Carlson wrote. “Of course, I don’t have my head in the sand. I will respond to all the new realities, but at the end of all that, I remain a progressive politician who believes all governments should be forces for public good.”

Mississauga Councillor George Carlson says elected officials should not make bad decisions in response to a temporary situation


Ron Starr, who represents Ward 6, provided a similar response, saying stability in tax increases was key. “I think tax should be kept about the same to maintain the same services,” he said. He said any decision to lower (or freeze) tax rates would result in a build-up of unfunded projects once the pandemic is over.

The careful answers, placing an emphasis on stability, hint at the difficulties of regional budgets. Peel is responsible for the infrastructure few think about (wastewater and stormwater to name two), along with extremely expensive and vital programs that include housing and public health. There are few headline grabbing or vote winning announcements to come from some of these portfolios, but the Region’s list of responsibilities offers a key chance to help those who have been hardest hit by COVID-19.

Still, with an election always around the corner and with the 24/7 nature of campaigning these days, low taxes are a constant temptation for populist politicians like Brown and Damerla who pander to those who can win them elections, not their residents who need help the most.

“Municipal budgeting is pretty straightforward because they have to balance their operating budgets,” Enid Slack, director of the Institute on Municipal Finance and Governance at University of Toronto's Munk School of Global Affairs and Public Policy said. “You’ve got expenditures on one side, revenues on the other and they have to match.”

So what does council want its 2021 budget to achieve?

A lack of revenue tools at the local level (limited to the property tax, user fees and development charges, on top of grants from higher levels of government) make decisions harder.

Is a tax reduction just going to put more pressure on the programs needed most by the residents hit hardest by the pandemic?

“Many of the programs that you’re looking at, that you’ve identified, are provincially funded and we’re able to apply for grants and funding from the provincial government, either through some of the assistance plans or through the federal government, through the Rapid Housing Initiative ... there are programs for that that are available for assistance,” Mississauga Mayor Bonnie Crombie told The Pointer at a press conference.

It’s true that some cash from the Province is available to fund Peel’s social services programs, but that does not absolve local politicians of responsibility. As the custodians of regional dollars, they are faced with decisions about whether to cut services or top up insufficient provincial contributions with property tax funds.

More often than not, Peel’s leaders have pointed to the broken system and then turned the other way. On housing, which has been a local responsibility since before the turn of the century, the Region’s record is woeful.

As Crombie highlighted, resources from other levels of government are available, but they aren’t designed to be the foundation of any affordable housing policy. In Peel, 2020 has seen an unusually large amount of money allocated for affordable housing and shelter support in the region, with $276 million in August and a further $30 million last month. Despite these bright sparks from Ottawa and Queen’s Park, to address the desperate housing situation here, the Region’s own commitments have fallen away.

The 2020 budget process saw councillors quietly abandon their own plan to bring 7,500 new affordable units online each year until 2028. 

The plan, called Home For All, was launched by the Region in 2018 and calls for 75,000 units by the end of the ten-year period. Last year’s budget made it clear the Region was not prepared to fulfill its own initiative as only a tiny fraction of the units, around one percent of the annual target, had come online since it was launched. Home For All, despite all the planning and approval by Regional Council, is now effectively dead.

Many argue this local failure is rooted in an unfair system. There are challenges around using the property tax to fund areas downloaded by higher levels of government, without being granted additional revenue tools.

But a review of budgets over ten years shows local elected officials around the regional table simply have not prioritized social services. 

There are two realities at play: Politicians service those who vote for them and wealthier, older home owners who don’t rely on many of these social services want their property taxes kept low; Peel councillors have failed to grasp that pumping excessive amounts of money into the police budget (it went from $290 million in 2010 to $490 million in 2020) while neglecting to fund many areas such as housing and youth services, is a reactive approach to policing, not a proactive way to look at the entire budget picture as a whole.

“Cities do a lot of different things and therefore they need different ways to pay for them,” Slack explained, saying the property tax was suitable for shared services like roads, street lights or parks.  User fees, she added, are also appropriate for transit or recreational facilities. “There’s a third [area], which are redistributive services. You are really distributing from high income households to low income households. That would be your social housing, social services, public health. Those are things that are better on an income tax because it's the most progressive tax.”

For councillors gathering around a virtual regional budget table in January, the unfairness of Ontario’s tax system doesn’t change the reality faced by so many families in Peel. With countless studies showing COVID-19 disproportionately impacts society’s most vulnerable, it remains unclear if concentrating on the costs paid by property owners is the most equitable way forward.

Where does that approach leave renters?

What happens to those who rely on Peel’s overcrowded shelter system?

And single parents who need child care subsidies?

“We can't cut spending on the essential services that help low income and seniors at the Region,” Ward 9 Councillor Pat Saito said, highlighting she will have a clearer picture once the budget document is released. “Health and social services are our priority and if we have to cut other budgets to support those then I will do so.”

She added the police budget, set to increase by 3.8 percent, was a concern. “I have advocated for balancing the budgets of police and social services and I do see some changes being made, so that we spend more on social service and prevention rather than enforcement,” Saito said.

New rules passed by the provincial government as part of its 2020 budget could also allow Mississauga’s pro-business council” to greenlight a general tax increase in good conscience. Regulations currently being drafted at Queen’s Park should allow cities to identify small businesses as a specific subclass of the tax base and exempt them from the fixed system of property tax in 2021.

The property tax is a blunt tool and Peel has a series of commitments to those residents regional government is responsible to protect. They expect a clearly articulated philosophy when councillors make their final decision on the 2021 budget.


Email: [email protected] 

Twitter: @isaaccallan

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