The tax dilemma in Northern [Ontario] towns (Thunder Bay Chronicle-Journal Editorial – May 22, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

A Northern town trying to shore up its assessment base by attracting new residents would be hard pressed to do so if potential newcomers knew they’d be facing sky-high taxes. Yet that’s the dilemma in Schreiber, where a lack of industry has left some homeowners paying $5,000 or more in residential taxes just so the town can keep the streets plowed and streetlights on.

One of the North’s oldest municipalities, Schreiber was once fairly prosperous, one of many single-industry towns on the Trans-Canada Highway.

But as its businessman mayor Don McArthur explains, for more than a decade the town has been slowly crumbling in the wake of a mine closure and the overall forestry collapse that felled many towns like it between Kenora and White River.
A situation that has left residents paying the price for a backlog of $3 million of unpaid and uncollectable commercial taxes has reached the point of no return, it seems.

If it isn’t addressed soon, says McArthur, the town will spend another 10 years lucky to tread water while its neighbours break free of the recession. In the short term, McArthur wants the province to cover half the cost of clearing the hefty backlog so the municipality can reduce the time required to break free of what the mayor bluntly terms “a financial sinkhole.”

The province hasn’t said it will agree to that, which may not be surprising. It’s hard to imagine other depressed Northern towns not requesting a similar bailout if Schreiber gets such a lifeline.

But McArthur’s request isn’t just about going cap in hand.

In a letter to Municipal Affairs Minister Linda Jeffrey, he notes an increase in the number of Schreiber residents — professionals, businesspeople and retirees among them — who are choosing to live or set up shop just outside the town boundary on Crown land to avoid paying the municipality’s high taxes.

It’s certainly within their rights to live there, and McArthur has likely not endeared himself to some of those folks who do — especially when, presumably, they pay for their own water and sewage services.

But it hardly seems fair that someone who is paying very minimal Crown-land taxes can make the short drive into Schreiber to enjoy the town’s well-equipped recreation complex while the town — with its ever shrinking tax base — struggles to operate it.

This is an issue that likely applies to other small municipalities that bump up against rural lots. If the playing field is indeed uneven, then the province should look at ways to even it.