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  Sarnia Ontario Canada

A dramatic hike

Is Sarnia open for business or not?

That's the question that must be asked in the wake of news that city council is trying to dramatically hike taxes on eight commercial and industrial properties.

Specifically, it has filed appeals to Ontario's Assessment Review Board in a bid to fleece more money out of people who have upgraded their properties and created jobs.

The municipality claims the properties are assessed at levels significantly below market value. If the city is successful, it could rake in as much as $100,000 in extra tax revenues. But at what cost?

Taxes are already burdensome and pushing them higher will only drive away new development. At the same time, skyrocketing assessments will discourage owners from fixing up their properties.

An example of just how serious the situation is can be gleaned by taking a look at what the city is proposing to do to Farhi Holdings Corporation.

If bureaucrats at city hall have their way, the London-based firm will see its Northgate Plaza property assessment skyrocket from $865,000 to a whopping $2.6 million.

The property is under development and is the future site of the Canadian Coast Guard office, a super-sized Shopper's Drug Mart and additional retail and office space.

Owner Shmuel Farhi said when he purchased the land it was not even serviced. "We had to spend over $1.4 million just to get it to a point so we could develop it."

Now he's facing a major tax hike before he even: gets his project up and running.

Of course if properties really are under assessed, it means other tax- payers must pick up the slack.

No one will deny that that's unfair.

But the answer isn't to implement immediate, punishing tax hikes. Instead, council should phase in any increase over a number of years.

"Council claims that Sarnia is open for business. But actions speak louder than words. If it's really serious about attracting new development, it will put the brakes on what is little more than a grubby tax grab.

(Editorial The Observer 2006 07 22)