This article was submitted by Asquith Allen, Director of Policy and Regulatory Affairs for the Federation of Rental Housing Providers of Ontario.

With the housing crisis the nation is confronting, the federal government deserves praise for removing their portion of the HST on purpose-built rental construction. Likewise, kudos to the Government of Ontario for their swift commitment to do the same. Cue the City of Toronto and other cities to provide relief and instead, we get potential or enacted property tax increases.

As most people can accurately discern, tenants in our province pay property taxes through their rent. This is why Ontario’s Residential Tenancies Act appropriately mandates a rent reduction to pass through year-over-year decreases of more than 2.49% and allows rental owners to apply for an Above Guideline Increase for yearly tax bills that grow by more than the same amount.

While we know that some politicians in the GTA are ‘ready to tax,’ true progressives should be having a conversation about who should be paying these taxes. To highlight the current tax unfairness, let’s look at the City of Toronto which currently taxes residential property at a rate of 0.506% of its value. Ownership housing — detached, semi-detached, town and stacked townhomes, as well was condominiums — are all captured in the RT tax class. Multi-residential properties are in a separate (MT) class and are taxed almost double the residential rate at 0.967%. There is a new multi-residential rate which a 2017 law forbids from exceeding residential rates, but as the name suggests, this only applies to new builds.

With nearly half of Toronto’s population living in purpose-built rental housing, the overwhelming majority of tenants as a group are then subsidizing the living costs of Toronto’s homeowners. And as a renter, I find this government-imposed economic inequity deeply frustrating.

If ‘growth pays for growth,’ users should pay for use.

It’s high time we re-balance the property tax burden so that those who are lucky enough to own their own home (from which tax-free capital gains accrue) proportionately fund our municipal services. Municipalities should charge people who do not own their homes no more than half what they expect homeowners to hand over. This is progressive policy that would protect the middle class and those seeking to join it. Federal and provincial governments would do well to incent these types of policies. Federal Housing Minister Sean Fraser has been effective in using the accelerator fund carrot and not a stick in bringing municipalities to the table on the issue of missing middle supply and outdated zoning.

This is a highly regulated industry, but unlike others, there seems to be an inverse risk-to-reward relationship when it comes to investing in purpose-built rentals. Going forward if rental price stabilization is what we want, the costs of operating rental stock should be just as stable.