Where Your Tax Dollar Goes - How the various levels of government are funded

·4 min read

As a tax payer, you’re probably curious as to exactly what your hard-earned money pays for. Over the next nine weeks leading up to the Oct. 24 municipal election, the Cosmos will hopefully give you a little more insight. This week, we’ll talk about which taxes fund which levels of government, and in what proportion. The next two weeks, we’ll talk about two important entities funded by municipal taxes: education and regional government. And the last six weeks, we’ll break down the budget of the level of government which is closest to you: the Township of Uxbridge.

Four Levels: A resident of Uxbridge has four levels of government which she supports, and upon which she is represented:

- The Canadian federal or national government, whose capital is Ottawa. Our representative there is Member of Parliament Jennifer O’Connell.

- The Ontario provincial government, whose capital is Toronto. Our representative there is Member of Provincial Parliament Peter Bethlenfalvy, who is also the government’s Minister of Finance.

- The Region of Durham, a second-tier municipal government headquartered in Whitby. The Region is comprised of eight first-tier local governments, for which it performs a number of services. According to their population, each member municipality has a varying number of representatives on Durham Region Council. Uxbridge has two, our mayor and regional councillor. Only one member of Region Council, its chair, is elected at large by all residents of the Region.

- The Township of Uxbridge, governed by a seven-member council - mayor, regional councillor and five ward councillors - who will be chosen in the upcoming municipal election.

There is a fifth entity supported by your taxes, and upon which you have an elected representative: the school district, or board of education. You choose which school district to support. Two of them have schools in the township: the Durham District School Board, which operates six public schools here, and the Durham Catholic District School Board, which operates one. There are also two French-language boards inDurham, but they have no schools in Uxbridge. Our representatives on all these boards will be determined in the coming municipal election.

The “Senior Levels” - The two upper levels of government, federal and provincial, are supported by individuals through two principal forms of taxation. Income taxes are collected by Ottawa and shared with the Ontario government; almost all provincial governments receive a somewhat smaller proportion than Ottawa, although this is subsequently equalized in a number of ways, such as grants and transfer payments. Sales taxes are collected separately by the two levels. The federal retail sales tax (GST) is at 5 per cent. The Ontario sales tax (PST) is at 8 per cent; other provinces have different levels (Alberta has none at all). For simplicity, these sales taxes are often combined at the till into a harmonized tax (HST). Particular types of goods, such as cigarettes, alcohol, or gasoline, are taxed separately.

Municipal Taxes - The two lower levels of government, as well as the school districts, are primarily funded by property taxes, although every municipality has other revenue streams in varying proportions, such as user fees or grants from senior government. There are four main types of property taxes: residential (84 per cent in the 2022 Uxbridge budget), commercial (8.4 per cent), industrial (3.7 per cent), and farmland (2.1 per cent). The tier-one municipality, in our case the Township of Uxbridge, collects the property tax for the school districts and Region of Durham, and distributes them in varying proportion according to the source. In 2022, 58 per cent of residential taxes went to the Region, 14 per cent to the school districts, 28 per cent to the Township. In the case of commercial/industrial taxes, 43 per cent went to the Region, 35 per cent to education and 22 per cent stayed here with the Township.

The amount you pay on your property varies each year depending on two principal factors: the taxation rates assessed by each of the three taxing entities, and the value of your personal property, as assessed by the Municipal Property Assessment Corporation, a provincial agency. If you’re unhappy with any of these values, there are avenues of appeal.

One final note. Even if you don’t own property, your landlord does, and he passes on all of his costs, including property taxes, to you through your rent. So indirectly, you’re paying municipal taxes just like everybody else.

Conrad Boyce, Local Journalism Initiative Reporter, The Uxbridge Cosmos