‘It's something that we really have to look at’: City councillors teaming up to enact Vacant Storefront Tax

A couple of municipal councillors from Windsor and Ottawa are teaming up to engage all Members of Provincial Parliament about a proposed Vacant Storefront Tax as a way to revitalize downtown cores across Ontario.

The duo believes that revitalizing downtown cores is key to economic recovery in Canadian cities, stating main streets are the beating hearts of neighbourhoods and communities.

"A lot of downtowns are dealing with similar issues around housing, homelessness and the opioid crisis. But I think the one at the municipal level that we can really leverage and make a lot of impact on is having this idea of a vacant storefront tax," said Ottawa Councillor Stéphanie Plante.

Plante explained, "I think main streets need to be vibrant. I think main streets need to be animated. I think we need to have people circulating on our main streets and one of the best ways we can do that is ensuring that there are no vacancies for prolonged periods of time."

Plante pointed to recent success of a similar "vacant unit tax" in Ottawa that she said has generated over $10 million while adding 500 rental units back into the local housing market.

"Much like the vacant unit tax, we need the province to unlock that tax class," Plante told CTV News. "What works for downtown Ottawa is not going to be the same that works for downtown Toronto or Windsor or Timmins or Hamilton and so we are reaching out to all MPPs."

"We're trying to do all we can to fix our downtowns," said downtown Windsor Ward 3 Councillor Renaldo Agostino.

Agostino noted with the changing nature of brick-and-mortar retail, vacant storefronts are on the rise, suggesting Windsor residents are left living with the negative effects.

"Across the province, I think every downtown is suffering from the same issue."

"Windsor has taken some other steps through strengthening the core that I feel are going to work and have been working already. But this is a full team effort when it comes to downtown councillors across the province," Agostino explained.

He said the stated goal of the tax is to reduce the long-run vacancy rate, thereby decreasing the total magnitude of externalities the vacancies create for residents and pedestrians.

"What I want to see is cooperation, especially from people that are out of town that don't see the bigger picture. I get it it's your money. You do what you want with it, but at some point you can't hurt the person that's investing next door to you that's trying to make their businesses thrive."

Agostino said the right tax policies to incentivize landlords to make retail space available for businesses at an affordable rate has to be created, noting that landlords need to maintain, occupy or rent their storefronts to reduce vacancies.

"This is not just a Windsor thing. It's not just in Ottawa. It's not just a Toronto thing. It's not just a London thing. It's something that's happening across the province and I think it's something that we really have to look at."

Meantime, Windsor-Tecumseh MPP Andrew Dowie said he's not convinced a tax on commercial property owners is appropriate, after recent discussions with both councillors on the topic.

"We need to be mindful of unintended consequences," Dowie said, while noting he is open to further talks.

"I think when you look at the vacant home tax; we have a shortage of housing options. There is not a shortage for retail and commercial options and so if there's a shortage of prospective tenants in some of these units, it's important that we keep that in mind there may not be uses for all the spaces that we have."

Plante and Agostino said they hope to arrange virtual meetings with all Ontario MPPs to discuss the topic before the holiday season.