Motkaluk promises 1.16% property tax hike, plan to change the way Winnipeg collects revenue

Motkaluk promises 1.16% property tax hike, plan to change the way Winnipeg collects revenue
Winnipeg mayoral candidates Motkaluk, Diack reveal tax plans
Mayoral candidate Jenny Motkaluk is promising to change the way Winnipeg assesses residential properties as part of a pledge to cap property tax increases at 1.16 per cent a year.

Motkaluk said Thursday if she's elected mayor on Oct. 24, the city would no longer raise property taxes based on the overall pool of revenue collected from residential properties.

"We don't need another 'freeze, don't freeze' tax announcement," she said Thursday at her campaign headquarters on Ness Avenue.

"What we need is smart and simple tax reform. We need to know what we have to pay and when we have to pay it and what we're paying for."

Under Winnipeg's current property tax regime, the city sets a target level of overall revenue — for example, $585.6 million in 2018 — and enacts a tax hike to meet that that target.

Individual property tax bills can rise higher or even drop because the city redistributes the pool of property tax revenue among different neighbourhoods every two years, based on assessments.

That redistribution aims to reflect varying market conditions in different areas of the city. Motkaluk is promising to stop comparing one neighbourhood with another.

Under her tax plan, residential properties occupied by their owners would receive hikes of 1.16 per cent a year, regardless of market conditions in Winnipeg overall, or home improvements such as renovations or additions.

Owner-occupied residential properties would only be subject to reassessments once they are sold, she said.

"Homeowners will know exactly what their tax bill for the next four years will be: 1.16 per cent [higher than] what their bill was last year. That's it," she said.

Commercial properties, industrial properties and rental properties would still be reassessed once every two years. She said this will have no effect on the rental market or the ability of rental property owners to fix up apartments.

Motkaluk's plan would raise an additional $6.8 million for the city in 2019. She suggested the money would flow into general revenue for the City of Winnipeg.

This would end a practice that began during the Sam Katz administration, when Transcona Coun. Russ Wyatt —​ in his role as council finance chair —​ started devoting the proceeds of property tax hikes to infrastructure renewal.

After being elected mayor in 2014, Brian Bowman continued this practice and expanded on it. He has pledged during his re-election campaign to continue raising property taxes by 2.33 per cent a year, with the proceeds of two percentage points devoted to road renewals and the remaining 0.33 per cent hike devoted to rapid transit.

Motkaluk said her plan would provide property owners with more certainty. She said the city would continue to gather reassessment information every two years because it's required to do so.

She has consulted tax experts, she said, and believes she would have the authority to institute the changes in question without contravening the City of Winnipeg charter.

Incumbent mayor Brian Bowman said it's not clear the City of Winnipeg has the legal authority to make the changes proposed by Motkaluk and noted whoever is elected mayor on Oct. 24 must work on a 2019 city budget that comes before council no later than February.

Bowman also said Motkaluk has presented no plan to pay for road renewals — something Motkaluk said she expected to say.

Mayoral candidate Tim Diack also made a tax pledge Thursday, promising a 1.2 per cent property tax that would raise an additional $7 million for the city in 2019.

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Winnipeg mayoral candidates Jenny Motkaluk and Tim Diack revealed their respective property tax plans on Thursday, less than two weeks from the municipal election on Oct. 24.

Motkaluk is promising to cap residential property tax increases at 1.16 per cent a year, for as long as you own your home.

“The tax system today provides an immense amount of complexity and every time you get your bill in the mail, before you open it, you have no way of knowing how much your bill is going to be and that is the thing we’re going to change.”

Under tax plan, Motkaluk said homeowners will no longer be penalized for renovations, as long as the home is owned. Once the home is sold, the new assessed value will set the new tax rate for the next homeowner.

Motkaluk said she has consulted experts on her tax plan and it would not require any provincial approval.

Tim Diack said, if elected, he would increase property tax no more than 1.2 per cent in his first year and would would freeze the determined tax rate the following year.

By year three, he plans on reducing both property and business tax, after “budgets spending is under control and efficiencies are identified.”

“Winnipeggers already pay the highest tax rates in the country and we cannot keep asking them for more.”

Brian Bowman stated his continuing commitment to his tax plan back on Sept. 28, and called on fellow candidates to share their tax theirs, warning Winnipeg’s progress on roads could be in jeopardy.

Bowman said the six-year $976 million road renewal program, funded in large part from property tax hikes, was at risk under new leadership.

“The first commitment I made was on property tax increases, and all the other campaign commitments Ive made to date are costed and funding sources are clearly identified, Bowman said.