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Staff Report
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Report To: General Government Committee
Date of Meeting: November 6, 2023 Report Number: FSD-040-23
Submitted By: Trevor Pinn, Deputy CAO/Treasurer
Reviewed By: Mary -Anne Dempster, CAO Resolution#:GG-183-23
File Number:
Report Subject: 2024 Interim Tax Levy
Recommendations:
By-law Number: 2023-065
1. That Report FSD-040-23 and any related delegations or communication items, be
received;
2. That the By-law attached to Report FSD-040-23, as attachment 1, be approved; and
3. That all interested parties listed in Report FSD-040-23 and any delegations be
advised of Council's decision.
Municipality of Clarington Page 2
Report FSD-040-23
Report Overview
The Municipality of Clarington annually levies an interim tax before the approval of the final
tax rates to ensure it can meet its financial obligations until the final tax levies are processed.
1. Background
1.1 The Municipal Act, 2001 authorizes a municipality, prior to the adoption of the estimates
for the year, to pass a by-law levying amounts on the assessment of property in the
local municipality for local municipal purposes.
1.2 Historically, the Municipality has passed an interim tax levy in December of the
preceding year to ensure that tax bills are processed in January of the taxation year.
Section 317(2) allows the by-law to be passed in November or December of the
preceding year (2023) provided the by-law does not come into force until a specified
date in the following year (2024).
1.3 Interim tax bills are divided into two installments: February 15, 2024, and April 18, 2024.
1.4 If Council did not pass the interim tax levy, taxes could not be collected until the final tax
bills were processed in the spring. This delay could result in a cash flow issue for the
Municipality and taxpayers having to pay their taxes in two instalments rather than the
current four (or more if they use pre -authorized payments).
2. Financial Considerations
2.1 An interim tax levy provides cash flow to the Municipality in the first half of the year until
the final taxes can be levied in June and September. This change reduces the risk of
using interim borrowing, which would incur interest costs.
2.2 Interim tax levies also allow taxpayers to spread the annual tax bill over four payments
throughout the year rather than all the taxes being due in the latter part of the year. The
payments could be further spread over twelve months if the taxpayer signs up for pre -
authorized payments, which provides a constant flow of cash for the Municipality to
meet its financial obligations during the year.
2.3 Taxpayers can pay their taxes at any time prior to the due date, for example payment
could be made bi-weekly or monthly. Interest does not start getting charged until, and if,
there is an outstanding balance after a due date.
Municipality of Clarington Page 3
Report FSD-040-23
3. Concurrence
3.1 Not Applicable.
4. Conclusion
4.1 It is respectfully recommended that Council approve the 2024 Interim Tax By-law to
ensure that interim tax bills are processed consistent with past timelines and to ensure
that tax revenues can be collected throughout the whole 2024 taxation year.
Staff Contact: Jessica James, CMRP(A), Manager, Taxation Services, 905-623-3379 ext.
2609 orjjames@clarington.net.
Attachments:
Attachment 1 — Draft by-law to levy interim taxes for 2024
Interested Parties:
There are no interested parties to be notified of Council's decision.
Attachment 1 to Report FSD-040-23
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The Corporation of the Municipality of Clarington
By-law 2023-OXX
Being a by-law to authorize an Interim Tax levy for 2024.
Whereas the Council for the Municipality of Clarington deems it necessary to pass a by-
law to levy an Interim Rate for 2024 on the whole of the assessment for each property
class in the local municipality as provided for in Section 317 of the Municipal Act, 2001
as amended;
And whereas Section 317 (2) of the Municipal Act, 2001 as amended, allows a by-law
to levy interim taxes to be passed in November or December of the previous year if it
provides that it does not come into force until a specified day in the following year.
Now therefore the Council of the Municipality of Clarington enacts as follows:
That the Council of the Corporation of the Municipality of Clarington is hereby
authorized to levy in 2024 on the whole of all taxable assessment on the property
according to the last revised assessment roll, a sum not to exceed that which
would be produced by applying the prescribed percentage (or 50 per cent if no
percentage is otherwise prescribed) of the total amounts billed to each property
for all purposes in the previous year on the properties that, in the current year, are
in the property class as provided for in Section 317 of the Municipal Act, 2001 as
amended;
2. That for the purposes of calculating the total taxes for the previous year under
paragraph 1, if any taxes were levied for only part of the previous year because
assessment was added to the roll during the year, an amount shall be added
equal to the additional taxes that would have been levied if the taxes had been
levied for the entire year;
3. That the interim tax levy rates shall also apply to any property added to the
assessment roll after this by-law is enacted;
4. That all taxes levied under the authority of this By-law shall be payable in
Canadian funds and shall be divided into two equal instalments, the first of
said instalments to become due and payable on or before the 15th day of
February 2024 and the second of said instalments to become due and payable
on or before the 18th day of April 2024 and shall be paid to the Treasurer of
the Corporation of the Municipality of Clarington. Upon payment of any
applicable fee, and if paid on or before the due date imprinted on the bill, taxes
may also be paid at most chartered banks in the Province of Ontario;
5. That as Section 342(b) of the Municipal Act, 2001, as amended provides for
alternative instalments and due dates in the year for which the taxes are imposed
other than those established under clause (4) to allow taxpayers to spread the
payment of taxes more evenly over the year. A taxpayer may pay taxes on a 12-
month pre -authorized payment plan payable on the first day of each month from
December to November. In the event of the default of payment on the pre -
authorized payment plan, enrolment in the plan shall be terminated and the
interim tax levy shall be due and payable on the instalment dates as set out is
Section 4 of this by-law;
6. That as provided in Section 345 (2) of the Municipal Act, 2001, as amended if the
taxes or any instalment levied in accordance with this by-law remain unpaid on
the first day of the month following the instalment due dates set out in Section 4 of
this by-law, a penalty of one and one quarter per cent (1.25%) will be imposed on
the amount for taxes due and unpaid; and
7. That as provided in Section 345(3) of the Municipal Act, 2001 as amended any
taxes levied pursuant to this by-law that are due and unpaid, interest at the rate of
one and one quarter per cent (1.25%) per month (15% per annum) of the unpaid
taxes shall be levied on the first day of each calendar month for so long as the
taxes remain unpaid.
8. That in accordance with the Municipal Act, 2001, Section 317(2) this by-law shall
be effective on January 1, 2024.
Passed in Open Council this XX day of November, 2023.
Adrian Foster, Mayor
June Gallagher, Municipal Clerk