O. Reg. 162/02: TAX MATTERS - PART XXII.3 OF THE ACT - 2001 TAXATION YEAR

 

ontario regulation 162/02

made under the

municipal act

Made: May 22, 2002
Filed: May 22, 2002
Printed in The Ontario Gazette: June 8, 2002

Amending O. Reg. 171/01

(Tax Matters — Part XXII.3 of the Act — 2001 Taxation Year)

1. The title to Ontario Regulation 171/01 is revoked and the following substituted:

Tax Matters — 2001 and 2002
taxation years

2. The heading to Part I and section 1 of the Regulation are revoked and the following substituted:

PART I
ADJUSTMENT TO TAXES — SUBSECTIONS 447.65 (1)
AND 447.68 (1) OF THE ACT

Application of Part

1. This Part provides for the adjustments to be made under paragraph 3 of subsection 447.65 (1) of the Act for 2001 and under paragraph 3 of subsection 447.68 (1) of the Act for 2002 in respect of changes in taxes for municipal purposes.

3. The Regulation is amended by adding the following section:

Adjustment for 2002

2.1 (1) The amount determined under paragraph 2 of subsection 447.68 (1) of the Act in respect of a property shall be adjusted,

(a) by increasing it by the amount determined under subsection (2), if the amount determined under subsection (2) is positive; or

(b) by decreasing it by the amount determined under subsection (2), if the amount determined under subsection (2) is negative. 

(2) The amount referred to in clauses (1) (a) and (b) is determined by multiplying the amount determined under paragraph 2 of subsection 447.68 (1) of the Act for 2002 by the  2002 adjustment fraction calculated under subsection (3).

(3) The 2002 adjustment fraction shall be calculated using the formula,

in which,

  “A” is the actual tax rate for the property for 2002 determined under section 3.1, and

  “B” is the adjusted 2001 tax rate for the property, as determined under section 4.0.1.

4. The Regulation is amended by adding the following section:

 Actual tax rate for 2002

3.1 For the purposes of subsection 2.1 (3), the actual tax rate for the property for 2002 means the rate determined under the following rules for the property class and local municipality the property is in:

1. Identify each tax rate for 2002 for municipal or school purposes on property in the property class in the local municipality.

2. For the purposes of paragraph 1,

i. a tax rate for the purposes of a special local municipality levy or a special upper-tier levy shall be identified for the purposes of this section only if at least 50 per cent of the sum of the assessments for properties in the property class, as set out in the assessment roll for 2002, as returned, relates to properties that are taxable for municipal purposes, and

ii. the tax rate for 2002 for school purposes is the tax rate prescribed for the year under section 257.12 of the Education Act.

3. The actual tax rate for the property for 2002 is the sum of the tax rates identified under paragraph 1.

5. The Regulation is amended by adding the following section:

Adjusted 2001 tax rate

4.0.1 (1) For the purposes of subsection 2.1 (3), the adjusted 2001 tax rate for the property means the rate determined under the following rules for the property class and local municipality the property is in:

1. For each general or special municipal levy for 2001 that applied to property in the local municipality, determine the 2001 levy amount under subsection (2).

2. Determine the total weighted assessment for the local municipality by adding the weighted assessment, as determined under subsection (3), for each property class to which the levy applied.

3. For each levy, determine the residential rate for 2001 by dividing the 2001 levy amount, referred to in paragraph 1, by the total weighted assessment determined under paragraph 2.

4. For each levy, determine a class rate for each property class for 2001 by multiplying the residential rate for 2001, as determined under paragraph 3, by the tax ratio for the property class for 2002.

5. For each property class, the adjusted 2001 tax rate is the sum of the class rate for 2001, as determined under paragraph 4, for the property class and the tax rate for 2002 for school purposes prescribed under section 257.12 of the Education Act.

6. Despite paragraph 5, a class rate for a property class shall be included in the calculation of the adjusted 2001 tax rate only if at least 50 per cent of the sum of the assessments for properties in the property class, as set out in the assessment roll for 2002, as returned, relates to properties that are taxable for municipal tax purposes.

(2) For the purposes of paragraph 1 of subsection (1), the 2001 levy amount shall be determined in the following manner:

1. Apply the tax rate for 2001 for each property class to the total assessment for property in the property class to which the levy applied.

2. For the purposes of paragraph 1, the total assessment for property in a  property class is determined by,

i. taking the sum of the assessments for each property in the property class, as set out in the assessment roll for 2002, as returned, and adjusting the sum for the changes in assessment that would produce the changes in taxes referred to in paragraphs 2 and 3 of subsection 372.2 (6) of the Act, if the property class is not subject to Part XXII.3 of the Act, or

ii. taking the sum of the assessments for each property in the property class, as set out in the assessment roll for 2002, as returned, and adjusting the sum for the changes in assessment that would produce the changes in taxes referred to in paragraphs 2, 3, 5 and 6 of subsection 447.65 (2) of the Act, if the property class is subject to Part XXII.3 of the Act.

3. The 2001 levy amount is the sum of the amounts determined under paragraph 1 for the property classes.

(3) For the purposes of paragraph 2 of subsection (1), the weighted assessment for each property class to which the levy applies is calculated using the formula,

in which,

  “C” is the sum of the assessments for properties in the property class to which the levy applies, as set out in the assessment roll for 2002, as returned,

  “D” is the tax ratio for the property class for 2002.

(4) For the purposes of subsection (3), the assessment for a property in a property class shall be reduced by the same percentage of the assessment as the percentage reduction, if any, under section 368.1 of the Act in the tax rate applicable to the property for 2002.

6. Section 4.1 of the Regulation is amended by striking out “sections 3 and 4” at the end and substituting “sections 3, 3.1, 4 and 4.0.1”.

7. (1) Section 6 of the Regulation is amended by striking out “2000 or 2001” in the portion before paragraph 1 and substituting “2000, 2001 or 2002”.

(2) Paragraph 1 of section 6 of the Regulation is revoked and the following substituted:

1. No adjustment shall be made under paragraph 3 of subsection 447.65 (1) of the Act for 2001 or under paragraph 3 of subsection 447.68 (1) of the Act for 2002 in respect of changes in taxes for municipal purposes.

8. Subsection 7 (2) of the Regulation is revoked and the following substituted:

(2) The tax rate for the general levy for the property class shall not exceed the sum of,

(a) the property class rate for the year determined under paragraph 4 of subsection 4 (1), if the year is 2001, or the maximum class rate determined for the property class under section 7.2, if the year is 2002; and

(b) the additional rate, if any, for the property class for the year that is determined under subsection (2.1), if the property class is one of the commercial classes or industrial classes.

(2.1) The additional rate for a property class for a year for the purposes of clause (2) (b) is determined in the following manner:

1. Determine the lowest rate that would raise an amount sufficient to fund rebates made under section 442.1 of the Act in respect of eligible charities occupying property in,

i. the commercial classes, if the property class is one of the commercial classes, or

ii. the industrial classes, if the property class is one of the industrial classes.

2.   If the property class is one of the commercial classes, allocate to the property class the rate that will result in the rates on all the commercial classes being in the same proportion to one another as the tax ratios established under section 363 of the Act for the commercial classes.

3. If the property class is one of the industrial classes, allocate to the property class the rate that will result in the rates on all the industrial classes being in the same proportion to one another as the tax ratios established under section 363 of the Act for the industrial classes.

(2.2) In this section, “commercial classes” and “industrial classes” have the meanings ascribed to those terms by subsection 363 (20) of the Act.

9. The Regulation is amended by adding the following sections:

Tax ratio

7.1 (1) The following tax ratios are prescribed for the purposes of subsections 366 (4.1) and 368 (4.1) of the Act for 2001 and 2002:

1. 2.74 for the multi-residential property class.

2. 1.98 for the commercial classes.

3. 2.63 for the industrial classes.

(2) If subsection 7 (2) applied to a property class in a municipality that was not an upper-tier or lower-tier municipality in 2001, the tax ratio established by the municipality under section 363 of the Act for the property class for 2002 shall not exceed the tax ratio calculated in the following manner:

1. Identify the general levy tax rate for the residential property class, as determined by the municipality for 2001 under section 368 of the Act.

2. Determine the increased residential tax rate by adding the tax rate identified in paragraph 1 and the rate for the special levy for the residential property class for 2001, as determined under section 8.

3. Divide the 2001 general levy tax rate for the property class that is subject to  subsection 7 (2), as determined by the municipality for 2001 under section 368 of the Act, by the increased residential tax rate determined under paragraph 2. 

(3) If subsection 7 (2) applied to a property class in an upper-tier municipality in 2001, the tax ratio established by the municipality under section 363 of the Act for the property class for 2002 shall not exceed the tax ratio determined under the following rules:

1. Identify the general upper-tier levy tax rate for the residential property class, as determined by the municipality for 2001 under section 366 of the Act.

2. Determine the special levy tax rate for the special levy for the residential property class for 2001, as determined under section 8.

3. Multiply the special levy tax rate determined under paragraph 2 by the upper-tier weighting factor determined under subsection (4).

4. Determine the increased tax rate for the residential property class by adding the tax rate identified in paragraph 1 and the product obtained under paragraph 3. 

5. Divide the general upper-tier tax rate for the property class that is subject to subsection 7 (2) by the increased tax rate for the residential property class that is determined under paragraph 4.

(4) The upper-tier weighting factor shall be determined in the following manner:

1. Determine the total general levy for each property class levied for upper-tier purposes in 2001 under section 366 of the Act.

2. Determine the total general levy for each property class levied for lower-tier purposes in 2001 under section 368 of the Act.

3. Add the amounts determined under paragraphs 1 and 2.

4. Divide the amount determined under paragraph 1 by the sum obtained under paragraph 3.

Maximum class rate for 2002 if subs. 7 (2) applies in 2002

7.2 (1) If the tax rates for the general levy imposed for 2002 by a local municipality under section 368 of the Act, by an upper-tier municipality under section 366 of the Act or by a lower-tier municipality in the upper-tier municipality under section 368 of the Act would otherwise result in revenues that would exceed the revenue limit for the municipality for 2002, as determined under subsection (2), the maximum property class tax rate for 2002 for a property class in the municipality to which subsection 7 (2) applies in 2002 shall be the rate determined as follows:

1. Determine the total weighted assessment for the municipality by adding the weighted assessments for all of the property classes in the municipality, as determined under subsection 4.0.1 (3).

2. For the 2002 general upper-tier levy or local municipal levy, determine the residential rate for 2002 by dividing the revenue limit for the municipality, as determined under subsection (2), by the total weighted assessment for the municipality determined under paragraph 1.

3. The maximum property class tax rate for 2002 for a property class in the municipality to which subsection 7 (2) applies is the product determined by multiplying the residential rate for 2002, determined under paragraph 2, by the tax ratio for the property class for 2002 as determined under subsection 7.1 (2) or (3).

4. For the purposes of paragraph 3, the tax ratio of a local municipality that is a lower-tier municipality is the tax ratio adopted by the upper-tier municipality for 2002.

(2) The revenue limit for an upper-tier or local municipality for 2002 shall be determined in the following manner:

1. Identify the general levy tax rate for each property class, as determined by the municipality for 2001 under section 366 or 368 of the Act.

2. Increase the tax rate determined under paragraph 1 by adding the special levy tax rate for the property class for 2001, if any, as determined under section 8.

3. Determine the revenue limit for 2002 for each property class by multiplying the tax rate for the property class, as determined under paragraph 2, by the sum of the assessments for all properties in the property class.

4. Determine the revenue limit for the municipality for 2002 by adding the revenue limits for 2002, as determined under paragraph 3, for all property classes in the municipality.

(3) For the purposes of this section, the assessment for a property in a property class is the assessment for the property set out on the assessment roll for 2002, as returned,

(a) less the amount, if any, equal to the same percentage of the assessment as the percentage reduction, if any, under section 368.1 of the Act in the tax rate applicable to the property for 2002; and

(b) after all adjustments to the assessment, if any, required by subsection 366 (2.1) or 368 (2.1) of the Act.

10. The heading to Part III and section 9 of the Regulation are revoked and the following substituted:

PART III
PRESCRIBED ADJUSTMENTS UNDER
SECTIONS 447.67 AND 447.69 OF THE ACT

No adjustment for changes in taxes for school purposes 

9. Despite sections 10, 10.1, 11 and 11.1, no adjustments shall be made for the purposes of the following provisions of the Act in respect of changes in taxes for school purposes:

1. Subsection 447.67 (2).

2. Paragraph 2 of subsection 447.67 (4).

3. Paragraphs 2 and 6 of subsection 447.67 (8).

4. Subsection 447.69 (2).

5. Paragraph 2 of subsection 447.69 (4).

6. Paragraphs 2 and 6 of subsection 447.69 (8).

11. The Regulation is amended by adding the following section:

Adjustment for 2002, various provisions

10.1 (1) This section applies for 2002 for the purposes of the following provisions of the Act:

1. Subsection 447.69 (2).

2. Paragraph 2 of subsection 447.69 (4).

3. Paragraph 2 of subsection 447.69 (8).

(2) The amount of the adjustment to the taxes for 2002 in respect of changes in taxes for municipal purposes shall be determined using the formula:

in which,

“E” is the amount of taxes for 2002 for municipal and school purposes, and

“F” is the 2002 adjustment fraction determined under subsection 2.1 (3).

12. The Regulation is amended by adding the following section:

Adjustment, par. 6 of subs. 447.69 (8) of the Act

11.1 (1) This section applies for 2002 for the purposes of paragraph 6 of subsection 447.69 (8) of the Act.

(2) The amount determined under paragraph 5 of subsection 447.69 (8) of the Act in respect of 2002 shall be adjusted,

(a) by increasing it by the amount determined under subsection (3), if the amount determined under subsection (3) is positive; or

(b) by decreasing it by the amount determined under subsection (3), if the amount determined under subsection (3) is negative.

(3) The amount referred to in clauses (2) (a) and (b) is the amount determined by multiplying the amount determined under paragraph 5 of subsection 447.69 (8) of the Act by the 2002 adjustment fraction determined under subsection 2.1 (3).

13. Section 12 of the Regulation is revoked and the following substituted:

Taxes not to be lower than uncapped taxes

12. (1) Despite subsections 447.67 (8) and 447.69 (8) of the Act, if the taxes for municipal and school purposes for 2001 or  2002, as determined under subsection 447.67 (8) or 447.69 (8) of the Act, whichever applies, are less than the uncapped taxes for that year, the taxes for municipal and school purposes for that year shall be equal to the uncapped taxes for that year.

(2) In this section,

“uncapped taxes” means, in respect of a year, the taxes for municipal and school purposes that would have been imposed for the year if Part XXII.3 of the Act had not applied.

14. Section 13 of the Regulation is amended by striking out the portion before paragraph 1 and paragraph 1 and substituting the following:

Previously unorganized territory

13. The following rules apply with respect to a property that was in territory without municipal organization and became part of a municipality in 2000, 2001 or 2002:

1. No adjustment shall be made for 2001 or 2002 under any of the provisions of the Act listed in section 9.

. . . . .

15. Section 14 of the Regulation is amended by adding the following subsection:

(2) If an additional assessment is made under section 33 of the Assessment Act for the 2001 taxation year in relation to an improvement and, in relation to the same improvement, an additional assessment is made for the 2002 taxation year under section 34 of the Assessment Act, subsection 447.68 (8) of the Act shall not apply with respect to the additional assessment for the 2002 taxation year.

16. Section 15 of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:

Special rule, eligible property under s. 447.70 of the Act

15. Any of the following properties that becomes taxable for municipal and school purposes in 2001 or 2002 is not eligible property for the purposes of section 447.70 of the Act in the year the property becomes taxable:

. . . . .

17. Section 16 of the Regulation is amended by striking out “for the purposes of sections 447.65 and 447.67 of the Act” at the end and substituting “for the year to which the payment relates for the purposes of sections 447.65, 447.67, 447.68 and 447.69 of the Act”.

Janet Lynne Ecker

Minister of Finance

Dated on May 22, 2002.

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