Toronto City Council voted unanimously in support of a motion that directs the City Treasurer to enter into negotiations with Victoria University to address the property tax exemptions granted through the Victoria University Act.
The motion had previously been adopted by the Government Management Committee. The motion also allows the treasurer to request that the province amend the Victoria University Act to remove the tax exemptions on land owned, but not occupied by, the university, if the university and the City of Toronto do not reach an agreement by September 30, 2017.
According to the report by the treasurer and City Solicitor, “There is no principled justification for the difference in the tax exemptions between Victoria University and OCAD U, Ryerson and York.” The latter three universities are required to pay property taxes on land owned, but not occupied by, the universities. The University of Toronto enjoys similar exemptions but voluntarily pays the City of Toronto in lieu of property taxes foregone.
The report goes on to say that this difference results in the university’s tenants not having to “pay the same level of property taxes that they would if their leased premises were owned by other universities or private commercial landlords.”
Victoria University is against amending the current tax exemptions. It says that these exemptions were granted in 1951 to incentivize the redevelopment of the neighbourhood into the upscale commercial district it is today. It states: “The City of Toronto has gained millions of dollars in tax revenue that it would not have received if those properties had continued to be used for student residences.”
The land that the institution leases out is part of the ‘Mink Mile.’ In 2015, the Financial Post reported a study by commercial real estate agency Cushman & Wakefield that found the average rent in the shopping district to be at $325 per square foot per year, the most expensive in the country.
The Toronto Star has reported that Victoria University had offered the City $100,000 annually in lieu of property taxes for up to five years.
In response to the vote, Ray deSouza, Bursar and Chief Administrative Officer of Victoria University, told The Varsity, “Victoria University is pleased to resume our discussions with City of Toronto officials. As we have stated in the past, Victoria University is committed to work in the best interests of our students and Victoria University.”
When asked if the province would be willing to amend the Victoria University Act as requested by the City of Toronto, Ministry of Advanced Education and Skills Development spokesperson Sean Greson said that they are aware of the ongoing negotiations between the two parties.
“In the past, the City of Toronto has been able to reach an agreement with the University of Toronto (subject to similar exemptions) that was satisfactory to both parties. We encourage the city and Victoria University to continue their negotiations and find a resolution that ensures the ability of the university to provide high quality education to students and addresses the concerns of the municipality,” Greson said.