Imagine if I told Ottawa residents that they could choose how much they paid in property taxes every year. I'm sure they would love that, but that's not usually how taxation works. You wouldn't be happy if your neighbour chose to pay less and that meant you had to pick up their share of the bill.
And yet the federal government, the largest property owner in Ottawa, gets to decide how much it pays in property taxes, or payments in lieu of taxes, to the City of Ottawa every year. So if they want to pay less, they pay less. And they do pay less, much less than their fair share. And guess who covers the shortfall? Local residents.
Eight years ago, the federal government paid Ottawa $194 million for their share of property taxes for the many buildings they own in the capital. This year, they paid only $164 million. Somehow, while everyone else's property taxes have been going up - and while the government has been growing significantly - they have ended up paying less.
We estimate that the federal government's unpaid tax bill to Ottawa is about $95 million a year. That's a huge amount of money to the city, the equivalent of a 5% tax increase that local taxpayers have been forced to cover. That just isn't fair.
And that's not the only way that Ottawa isn't getting its fair share from other levels of government. Many cities in Canada are facing significant budget pressures. But Ottawa is uniquely disadvantaged.
On public transit, we are uniquely tied to the federal government. We built our transit system to bring federal employees back and forth from downtown offices every day. And now, because of hybrid work, we've lost our number one customer. The loss of revenue just from downtown public servants this year is $36 million.
The federal government is the number one employer in Ottawa. I believe it has an obligation to help us with our public transit system, the system we built to serve federal employees.
In addition to the operating burden of declining ridership, Ottawa doesn't get the same deal as Toronto and other cities when we build new transit. The capital cost of a project like our light rail system was supposed to be shared equally among all three levels of government. But we've ended up paying 56% while the province and the federal government have paid 22% each.
Even paying one-third is much more than Toronto and other GTA cities pay. In Toronto, Mississauga, and Hamilton, the other levels of government don't just pay 44% or even 66% of the capital costs for many projects. They pay 100%. Local taxpayers in the GTA pay nothing for capital costs. In Ottawa, we pay 56%.
I've always believed in a collaborative and constructive approach. I've successfully negotiated funding from other levels of government for housing and homelessness, transportation, and public safety. But we need the other governments to treat us fairly in these two critical areas. Otherwise, we'll be shifting even more of the unfair tax burden onto local residents who are already paying too much.
We've done a lot of heavy lifting with the city budget. Over the past two years, city council has found $153 million in savings and efficiencies. But local taxpayers can't afford to keep paying the bill for other levels of government.
Because of reduced ridership, Ottawa has a $140-million hole in our transit budget for 2025. We can't even afford to open the next phase of our light rail system.
We need the federal government to pay us its back taxes. We need them to guarantee payments will stay at the appropriate level from now on. And we need both the federal and the provincial governments to pay their fair share for public transit and help us through our budget crisis so we can ensure public transit is sustainable and we don't have to make enormous cuts to the transit service.
Join me in my fight for Ottawa's fair share. Sign my petition at marksutcliffe.ca.
Mark Sutcliffe is the Mayor of Ottawa