Policy: Vacant Store Rebates

Vacant Tax Rebate Works Against Filling Empty Retail Space


storefrontUntil recently, owners of vacant commercial retail properties in Ontario may have received property tax rebates of up to 30%. These rebates act as a barrier to activating empty storefronts with pop-up shops. The pop-up shop project  has deputed to the Economic Development Committee each year between 2013-16 in support of changes to the tax rebate system. In February 2017 City Council passed a motion to reduce the allowable rebate percentage by half effective July 2017 and to eliminate the program in its entirety for future years. While the city of Toronto collects property taxes and administers the rebate, these changes must be finalized at the provincial level thru property tax regulations.

Action Timeline Regarding Vacancy Tax Rebate

February 2017: City Council approves elimination of the Vacancy Tax Rebate for future years.

313.  With respect to the Vacancy Rebate Program, City Council:
a.  request the Minister of Finance by regulation, to allow the City to reduce the allowable rebate percentage for vacant commercial and industrial properties under the program by half for 2017 effective July 1, 2017, and to eliminate the program in its entirety for future years; and
b.  subject to receiving the necessary regulation, request the Deputy City Manager and Chief Financial Officer to report back on the proposed design, re-investment priorities based on Council’s previously approved motions, timing, implementation requirements and any by-laws as may be required, as soon as practical.

June 2016: Economic Development Committee requested an update on the Provincial Review of the Vacant Unit Rebate policy and report on status of the Working group be provided at September 19, 2016 meeting. Requested that the general manager provide video created by WoodGreen/DECA to the Association of Municipalities of Ontario (AMO) and to the Toronto Association of Business Improvement Areas (TABIA) for their circulation to appropriate committees.

February 2016: Ontario Budget indicated changes to Vacant Unit Rebate are being explored stating the provincial review of the Vacant Unit Tax Rebate “responds to municipal and business stakeholder concerns regarding the appropriateness of the lower tax level provided through these (Vacant Unit Rebate) programs and any unintended implications this has for local economies… The Vacant Unit Rebate and Vacant/Excess Land Subclasses review continues in 2016 with stakeholder consultations on potential provision of additional municipal flexibility to reflect local needs.”

December 2015: City Council Adopted item ED8.5 Re-designed the Vacant Commercial and Industrial Tax Relief Program -Activity Report

October 2015: OBIAA (Ontario Business Improvement Areas Association) seeks changes to the Vacant Unit Rebate at Provincial Government Deputy Roundtable (PERL). In addition, the Province (Ministry of Municipal Affairs and Housing) reviewed the Municipal Act and City of Toronto Act (COTA).

October 2015: The Ministry of Municipal Affairs and Housing reviewed the Municipal Act and City of Toronto Act (COTA). The pop-up shop project submitted a response to this process in support of City of Toronto Council directed amendments addressing the development of new financial tools to encourage innovative uses of vacant store fronts in neighbourhoods.

February 2015: City Council adopted motion which included studying feasibility of expanding DECA/WG pop-up shop model:

1. City Council direct the General Manager, Economic Development and Culture to examine policies and programs to promote economic revitalization in significantly distressed retail areas and to report to the Economic Development Committee by the fourth quarter of 2015 on possible strategies to promote economic revitalization in these areas; such report to include the feasibility of expanding the Pop-Up Shop model, developed by the Danforth East Community Association, to revitalize vacant storefront space in other areas of the City.

February 2015: City of Toronto Operating Budget Briefing Note: Vacancy Tax Rebate

January 2015: Economic Development’s first committee meeting began with a presentation from Chair, Councillor Michael Thompson including this commitment:

Explore innovative, unconventional approaches to revitalize underutilized and vacant business properties

May 2014: City Council adopted the recommendations.

April 2014: The Economic Development Committee made recommendations regarding re-designing the Vacant Commercial and Industrial Tax Relief Program to Stimulate Economic Growth (Collaborating for Competitiveness, Implementation Action 8)

In 2012, city council approved a motion to “redesign the commercial tax relief program as a strategic incentive to stimulate economic development.” City councillors Mike Layton, Mary Fragedakis, and Janet Davis have worked towards implementing change.

More in the news:

John Tory says scrapping rebate for vacant businesses will save Toronto $22M a year
CBC News | Jan. 16, 2017

Tory’s plan to scrap vacant unit rebate is no empty gesture
Metro News | Dec. 5, 2016

A Montreal non-profit has big plans for the city’s vacant buildings
Toronto Star | July 3, 2016

Ontario’s vacant unit tax rebate under review
REMI network | Mar. 2, 2016

Victoria mayor seeks tax break for ailing Government Street
Times Colonist, Victoria BC | Jan. 27, 2015

Vacant property tax rebates raised in Ward 30 race
Toronto Star | Oct. 22, 2014

Toronto election: Karen Stintz promises to abolish tax break for vacant properties
Toronto Star | Aug. 6, 2014

Why did owners of vacant units in Toronto get $367M in tax rebates?
Metro News | May 7, 2014 Metro : this article has tons of details from city hall stats

City of Toronto promotes incentive programs for businesses
Urban Toronto | April, 2014: an overall perspective

 Landlords turn away smaller retailers, using a convenient tax rebate on vacant space…
Now Magazine | March 13, 2014