307 property owners owe $3 million in uncollected taxes

THUNDER BAY — The city is owed over $3 million of uncollected property tax from the 2023 tax season.

There are a total of 307 registered properties whose taxes are in arrears, which represents 1.2 per cent of the 2023 tax levy.   

The numbers aren't out of line with other years. “It’s fairly stable,” Kathleen Cannon, Director of Revenue told Newswatch.

“The number of properties in arrears is actually down this year compared to the last two or three years, so I would say it's fairly stable. It does fluctuate year over year a little bit but not too much. I would say it certainly shows that we are collecting. We don't have an issue with tax arrears in the city,” said Cannon.

She said the standard procedure is to have council approve the tax arrears certificates against the properties, which they unanimously voted to do during the council meeting on Monday.

From there, homeowners of the registered properties will have one year to pay off their balance or enter into a three-year extension agreement with the city.

Cannon said homeowners who do not pay off their balance, the city auctions the property at a tax sale.

“Typically, 98% of properties are paid before that tax sale happens so it is a very effective means of collecting taxes. Very few properties actually go right through to the end to be sold,” she said.

The city is required to advertise the property sale on the city’s website.

Cannon also said the city advises the tax sale for “four Saturdays in a row” in the Ontario Gazette and the Chronicle Journal.

“When we advertise the property for tax sale, we have to advertise it before the taxes owing on the account, and that includes any fees that they've accumulated through this process,” said Cannon.

“That has to be the minimum tender bid, the lowest amount that we can accept, and all of that is legislated through the municipal act.”

She pointed out that some people overbid on these properties. When that occurs, any amount left over from the tax sale, the city puts it towards court fees or it’s returned to the property owner.

The city only auctions these properties for the amount in taxes owned; however, there are cases where the city will sell a property at market value.

“If there aren't any bids, then we prepare a report to council and administration does some work to see if there are properties that we would want to take title to and maybe hold for municipal purposes or sell in the open market or if we don't want to do either,” said Cannon.

“There are on occasion properties that may have severe environmental issues or very costly structures to demolish and there are risks associated with taking title to the property. Those are very few and far between.

“Otherwise, we would often recommend that the municipality invest in any properties that don't sell. And then at that point, we could actually put them for sale at market or so if the market happens to be less than the taxes owing, which if they don't sell in a tax sale, that's usually the case that perhaps it's not worth what the taxes are. If we invest and take the title, then we can actually sell them at market value after that point."