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HomeMy WebLinkAboutTR-30-93 THE CORPORATION OF THE TOWN OF NEWCASTLE REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: May 3, 1993 Res. # By-Law# Report#: 93 File Subject: AGGREGATE EXTRACTION / REHABILITATION LEVY Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-30-93 be received; and 2 . That Council not support the call by the Town of Caledon to increase the portion of the aggregate tonnage levy (pursuant to the Aggregate Resources Act) that is payable to the host municipality, from $0.04 (four cents) to $0 .25 (twenty-five cents) per metric tonne; 3 . That Council request that AMO review the aggregate extraction levy following any changes made to the funding arrangements for roads as a result of any disentanglement decisions made by the Province; and 4 . That the interested parties be advised of Council's decision. BACKGROUND & COMMENTS 1. 1 The Ministry of Natural Resources currently levies $0. 06/metric tonne on the aggregate industry for extractions from gravel pits (pursuant to the Aggregate Resources Act) . Of this, $0.04/metric tonne is payable to the host municipality for the purpose of offsetting the associated costs relating to the extraction (most notably roads expenses) . The remaining funds collected are disbursed as follows: Region - $0.005, Province - $0. 0015. 1.2 An additional $0 . 08/metric tonne is levied as a rehabilitation security deposit which is refunded to the pit owner as costs are incurred to rehabilitate the gravel pit. TR-30-93 Page 2 1.3 In 1992, the Corporation of the Town of Caledon sent a letter to the Treasurer of Ontario requesting that the levy on aggregate mining payable to the host municipality be increased from $0. 04/metric tonne to $0.25/metric tonne. No action was taken on the provincial level so the Town of Caledon is seeking the support of other municipalities in Ontario where aggregates are mined. 1.4 The Town of Caledon is requesting Council to pass a motion calling for an increase in the above mentioned aggregate tonnage levy to be included in the 1993 Ontario Budget. They are also requesting that the Council notify and lobby the MPP for our area, the provincial Treasurer, and the Premier of Ontario as well as inform local media about the initiative. 2 . STAFF COMMENTS 2 . 1 The Town of Caledon has provided a comparison of the average taxes per acre paid to the Town by residential properties in Caledon Village and the average taxes plus levies paid per acre by the aggregate industry to the Town (Schedule A attached) . Their figures show that average residential properties in Caledon Village pay more than 22 times per acre in taxes than does the aggregate industry. The differential however stems partially from the assessed value of the aggregate properties as opposed to the residential properties . This, of course, is determined by the Assessment Office, over which the aggregate industry has no influence. Also, the municipal services required to be provided to the aggregate industry is different from those required by residential taxpayers . 2 .2 Comparable statistics have been compiled for the Town of Newcastle per the attached Schedule B. 2 . 3 The $0.25/metric tonne proposed by the Town of Caledon is an arbitrary figure determined without reference to any additional costs borne by the Town as a result of the aggregate industry's presence in the municipality. Town of Caledon staff could not provide any breakdown to support the $0 .25. Also the impact upon the local economy as a result of any additional levy (ie. job losses etc . ) has not been considered. Apparently, there was no consultation with the aggregate industry by their Town's staff. The aggregate industry appears to be a primary industry within the Town of Caledon and an additional levy of over $1,000,000 . 00/year would likely have a substantial economic impact. In the Town of Newcastle, the greatest impact of such an increase would be upon St. Mary's Cement. In the current economic environment and with the slowdown in the construction industry, this could have a significant impact upon the employment base in the Town of Newcastle. 109 TR-30-93 Page 3 2 .4 The Town of Caledon is contending that, as a result of the aggregate industry, the long term tax generating potential of many hundreds of acres in Caledon has been seriously impaired. This is due to substantial digging many metres below the water table. However, in order to obtain an aggregate extraction -license, rehabilitation plans must be submitted to the Ministry of Natural Resources for approval. According to the background research performed as part of the development of the Town of Newcastle Official Plan Review, for the Town of Newcastle, 82% of the rehabilitation plans show that lands will return to a natural state and the remaining 18% will be reforested for commercial purposes . This suggests that the long term tax generating potential of these lands has not been impaired. 2 .5 The Town of Caledon has 3968 acres of licensed aggregate pits. 22 (twenty-two) out of the total of 26 (twenty-six) sites are active. The Town of Newcastle has 2316 acres of which only 1675 acres are active. Also, the aggregates mined within the Town of Newcastle are primarily used for construction within the Town or for commercial enterprises within the Town. Aggregates mined in the Town of Caledon are principally sold to other interests outside the municipality (especially for uses in Metro Toronto) . As a result, the situation in the Town of Caledon is not particularly comparable to that of the Town of Newcastle. 3. CONCLUSION 3. 1 Based on the above discussion points, Staff recommends that the Town of Newcastle not support the Town of Caledon in its call for an increase in the portion of the aggregate tonnage levy payable to the host municipality to $0.25/metric tonne. Based on the attached schedule, the current aggregate levy combined with the Town's portion of taxes paid appears, at this time, to adequately cover the impact of the aggregate industry upon municipal roads . Also, in consideration of the potentially detrimental impact of such an increase on the economic development within the Town of Newcastle, an increase is not recommended. Respectfully submitted, Recommended for presentation to the Committee / J lie A. Marano H.BSc. ,A.M.C.T. Lawrence E. K6fseff Treasurer Chief Administrative Officer MAM/NT/ges i SCHEDULE A I COUNCJi UI ?. lOil li n 3 12 �G ►'d '93 February 12, 1993 Dear fellow members of municipal Council; We are writing to you as elected representatives serving on a municipal government in Ontario where aggregate (gravel, sand, rock) are mined. Our Council and Town has long felt that the total levies and taxes paid by the aggregate industry to our local government is absurdly small. Last year, as a prelude to the preparation of the 1992 provincial budget, we sent the attached letter to the provincial Treasurer. The reason for our letter was to call for an increase in the levy on aggregate mining that is payable to the host municipality, from the current four cents per metric ton, to 25 cents per tonne. r At the same tune, we sent a copy of our letter to a limited number of local governments nearby to Caledon. We did nothing more than copy these fellow municipalities; we did not ask them to endors.; our request; we simply made them aware of our point of view. Action on the provincial level was exactly zero, but the response on the municipal level was phenomenal. Municipality after municipality endorsed the call for an increase to 25 cents per tonne. Buoyed by this strong support, we have decided this year to initiate a more comprehensive approach to the problem that the gravel industry is not paying its fair share to the municipalities that host their digging. i FEBRUARY 12, 1993 PAGE 2 OF 3 To support the fact that the gravel industry is not paying its fair share, our Treasury Department compiled the following comparison for 1991 as between: I (a) the average taxes per acre paid to the Town by residential properties in Caledon Village; and (b) the average taxes plus levies paid per acre by the aggregate industry to the Town. (a) Average Caledon Village Home average assessment - $36,976 average lot size - .60.acres average 1991 property taxes (Town portion only) - $779 average residential taxes paid to Town per acre $1247 per acre (b) Aggregate Industry total acres licensed in Caledon - 3968 acres total aggregate levy paid to Town in 1991 - $150,209 total industry 1991 property taxes (Town portion only) - $70,471 average property taxes plus tonnage levy paid to the Town per acre in 1991 by the aggregate industry $56 per acre It is difficult to imagine a more stark contrast - average residential properties in Caledon Village pay more than 22 times per acre in taxes to the Town of Caledon than does the aggregate industry! i /3 . i Y. BRUARY 12, 1993 ZE3OF3 We would be very surprised if a similar inequity did not exist in aggregate producing municipalities throughout Ontario. Our purpose in writing to you is to seek your support and aggressive action in the following regards: (1) Please have your Council pass a motion calling for an increase in the portion of the aggregate tonnage levy(pursuant to the Aggregate Resources Act) that is payable to the host municipality, from four cents to 25 cents per tonne. This increase by the province should be included in the 1993 Ontario Budget. (Note that for comparison purposes, an increase to 25 cents per tonne would mean that in Caledon, average residential properties would pay 'only' five times per acre what lands licensed for aggregates pay). (2) Please notify and lobby your MPP, the provincial Treasurer and the Premier in terms of your support. If there are Cabinet members representing your area of the province, let them know how you feel. (3) Please let us know about your support as soon as possible, as well as any ideas or suggestions you may have. It will be our intention to arrange a meeting with the Provincial Treasurer, once the position of producing municipalities around the province is apparent, prior to the spring budget, to present a common position on the question of the appropriate level for the aggregate levy. (4) Please let your local media know about this collective initiative, and please feel free to quote from any aspect of this letter or our letter of a year ago. Finally, we thank you very much for your consideration of this matter, and we look forward to hearing your views and position as soon as convenient. You truly, 10 N Norman Calder K. By z �. � Mayor <<"..':idAl. _IL'�'��`_ TOWN OF CALEDON _.C{�-`I� TO :wc C/211.coun cc Members of Council ------- rjt7 THE CORPORATION OF THE TOWN OF CALEDON Box 1000, Caledon East, Ontario. 'LON 1 EO Telephone: 416.584-2272 Georgetown and Erin exchanges use April 1, 1992 Zenith 86130 FAX 416-857.7217 VIA FAX The Honourable Floyd Laughren, M. P. P. Treasurer of Ontario Frost Building S . , 5th Floor Queen' s Park Torcntc, Ontario M7A 1Y7 Dear Treasurer: RE: 1992 Provincial Budaet We are writing to seek your action to correct a situation that is both extremely unfair and environmentally unsound. The Town of Caledon is one of the province' s major producers of gravel, sand and rock products (known as "aggregate" ) . For years -- indeed decades -- we have been proud to supply millions upon millions of tons of gravel and sand to the province, particuiarly to Metropolitan Toronto. At the same time, as thousands of acres of our scenic municipality have been strip-mined and trucked away, the returns which we have received from being host to this industry can best be described as marginal. It is also important to remember that gravel and sand are a non-renewable resource, and we firmly believe that the tax on its production should directly reflect this critical fact, as well as other considerations. As Caledon produces approximately 5 million metric tons- per year, it is important to remember that: i) As a result of substantial digging, many metres below the watertable, the long term tax generating potential of many hundreds of acres in Caledon have been substantially eradicated. a 2 i i X14 2 - In those cases where the ultimate pit floor does not end up below the watertable, very often this pit floor is just one or a few metres above the watertable. As a result, development potential is considerably constrained and environmental sensitivities (eg. groundwater contamination) are forever increased. Large trucks hauling gravel and 'sand are regular users of both our municipal and Region of Peel roads . This is costly to us . Very often these heavy trucks are travelling pursuant to appropriate licenses and permits. All too often these trucks are travelling illegally on our roads . Enforcement is a difficult and expensive exercise; however, the costly impact on our roads is undeniable . iv) A significant number of Caledon residents have had to replace -- often more than once -- windshields and headlights on their cars due to cracks and breakage caused by, in the opinion of these motorists, stones falling and bouncing from aggregate trucks . While of course these accidents happen without any intention, in reality, these costs are a tax on certain unfortunate Caledon residents which flows from the priviledge of hosting the aggregate industry. v) The hundreds of truck trips each day through our villages and communities is disruptive to daily life and, in one instance at least, we believe prejudicial against desireable development (ie. Caledon Village) . Examples of such disruption occur in Caledon East, Bolton, Belfountain, Cataract area and Chinguacousy. vi) A quick drive through Caledon (particularly old Caledon Township) will certainly confirm that decades of sustained gravel and sand mining have resulted in permanent , ugly scars to our otherwise magnificent landscape. The costs to current and future generations is enormous . This brings us full circle back to the fact that gravel and sand is a non-renewable resource . . . . 3 i 3 _ We strongly believe that the portion of the levy on aggregate production that is currently directed to host municipalities is stunningly inadequate. We believe this (1) Because aggregate is a non-renewable . asset. (2) Because of the various large costs born by a host municipality and its residents during the years of active mining. (3) Because of the legacy and . compromised future which is left for succeeding generations subsequent to the end of mining. We therefore urgently request that through your 1992 budget for Ontario, the portion of the tax on gravel and sand production payable to. the host municipality be increased to 25 cents per tonne as an interim measure Deriding a thorough analysis of this matter. We thank you for your consideration of this matter, and look forward to the early correction of this extraordinary inequity in your 1992 budget. Yours truly, t Norman Calder Mayor dp cc Duffer*i n East Garafraxa Mono Mulmur Halton Durham Brock Scugog Uxbridge Eramosa Erin Puslinch Wellington Adjala Nottawasaga Orillia Oro Simcoe ~ York Whitchurch-Stouffvill,e < ; King o Hamilton-Wentworth Waterloo l North Dumfries ! U SCHEDULE B SCENARIO 1: Average taxes paid to Town per acre (Town -portion onlyl: A) Based On Average Residential Property: ...... ........ ....... .......... ............ .......... ......... ............ - O . ........RA ..................... ............. ..... ............ . . . ... .... ;;;:.:;.:.;;:.;;:.;:.;::.;T ...... ............ ................... ................ .. ..... :<:::>:::::::::::::>:::::::::... :::::>::::>::>:::::::::>:<:::<: .... ....... .......... . .... ................. ............. ................ ..... ............ .... . .......... . .. ... ........... ................ . ..... .... ................. 4 ....... 4 acres 3500 137.557 $481.45 $4,223 B) Based On Total Assessments For The Town: .. ........ . .... .... .—C ....... .......... ....... ... ............... .......... .. . ......... .. .................... axp.. ................. .................. .... ...... ................ . ............ f"****-*.............. ... .......... . .... ...... ...............................X.: :::...... a ei-`. .......... .... .... ...... ......................... X II ...... . . ... .. .......... . ................ ........ ............. ... .. ...... ................. ..... ............ .......... 74,718,964 148,365 137.557 $69.28 C) Aggregate Industry Average Taxes Paid Per Acre: ........... .............. ... ................ .............. ;-. ...... .: ................. ..................... ... ........................................:.. ................. .................. ....... e . . . : 0....,4...0... ...... ... ...X... ...M . ... . . ... .. ...... ........... ...... . .. ..... :......:-T........ . ........ ......... ... ......... 1675 2,316 $63,192 $547,352 $263.62 $364.50 SCENARIO 2: Estimate Of The Aggregate Industry's Share Of Road Expenses: Roads posh ........... ......................... . a ... .. . ........... ... ....... . P ........... ....... .. ................ . . ............. ................. ..... $7,426,585 148,365 $50.06 1675 $0.05 (Note: this covers entire allocation of roads expenses, not just the increased expenses due to aggregate extraction. ) SCENARIO 3: Estimate of aggregate industry's coverage of roads expenses based on usage of local roads (assuming maximum local use at 5% based on report PD-54-93) : Estimated 1992 Expenses: 5% of total road expenses 5% x 7,426,584. 76 = 371,329 Revenues: 1992 aggregate levy 63,192) 1992 property taxes =(547,352) Estimated revenue collected and applied to other uses =(239,215) The aggregate levy alone covers 17% of the aggregate industry's share of the total cost of roads. (63, 192/371329 = 17%) 7