Magnetawan council has approved a budget of nearly $9.9 million for 2021 and Mayor Sam Dunnett says council was able to keep the tax rate at a zero per cent increase for this year.
However, Dunnett says residents should not automatically conclude that this means tax amounts on their homes stay the same.
Dunnett says the amount of taxes paid is determined by what the home or cottage is assessed at as determined by the Municipal Property Assessment Corporation (MPAC).
He says the assessment could be higher especially if the owner did some renovations and a building permit was issued.
“MPAC has a direct line into municipalities for building permits and it gets a copy of them,” Dunnett said.
“And when the building permits are completed, MPAC uses the criteria to arrive at a new assessed value. So if the assessed value of your home went from $200,000 to $300,000, obviously you're going to pay more taxes.”
Dunnett says people do get confused by the process.
“They ask ‘if the tax rate stayed the same, then how come I got something like a $100 tax increase?’” Dunnett says.
“Our response is you must have done something to your property and then they remember doing just that.”
Dunnett says when the tax rate remains the same as the year before, the municipality tries to keep the budget the same as the previous year.
He adds the tax rate will fluctuate because it attempts to address how much money a municipality needs to operate and what the capital expenditures are for that year.
“And you don't tax beyond that because it's what you need on a yearly basis and it's what you pay taxes for,” Dunnett said. Dunnett also says a key to looking after the municipal finances is ensuring a municipality has money in place to replace existing infrastructure, which can include buildings, bridges, culverts and even municipal equipment. The replacement money for this infrastructure is placed in an asset management fund, a specialty fund the Premier Doug Ford government announced two years that it wants all municipalities to have. “The government said you can postpone it to next year, but we have ours in place,” Dunnett said. Dunnett says the municipality puts money in the fund on an annual basis and draws from it as needed to replace aging infrastructure. This is also how Magnetawan has been preparing for a major culvert replacement project where the estimated cost is anywhere from $750,000 to $1 million. By adding money to the asset management fund, the money is going to be there when work has to be carried out or equipment replaced. Dunnett says one element of the fund Magnetawan can't control is if an emergency occurs. At this point the council may have to increase the local taxes because the specialty fund may not have enough money in it to cover the cost of everything else that needs to be done in that year or future years.
Rocco Frangione is a Local Journalism Initiative reporter who works out of the North Bay Nugget. The Local Journalism Initiative is funded by the Government of Canada.
Rocco Frangione, Local Journalism Initiative Reporter, The North Bay Nugget