Time to End Area Rating for Transit

By Don McLean
Published September 12, 2007

Tuesday evening's Committee of the Whole (COW) meeting included a report from finance manager Joe Rinaldo on area rating [PDF] - the practice of charging different tax levies for certain services to different parts of the city. The subsequent discussion generated two votes on the issue.

Area Rating in Hamilton
Transit C&R Fire Slots
Ancaster 0.018% 0.043% 0.081% -0.011%
Dundas 0.021% 0.039% 0.110% 0.000%
Flamborough 0.000% 0.032% 0.069% -0.068%
Glanbrook 0.031% 0.019% 0.032% 0.000%
Hamilton 0.087% 0.074% 0.162% 0.000%
Stoney Creek 0.026% 0.036% 0.90% 0.000%

Source: City of Hamilton

During the debate, Mayor Fred Eisenberger declared in no uncertain terms that he did not want to have any discussion about area rating until some point in the future (definitely after the 2008 budget process).

Making reference to the transit steering committee work and resolution, Councillor Brian McHattie (Ward 1) moved a motion asking for a staff report on the implications of phasing out just area rating for transit.

It was seconded by Councillor Terry Whitehead (Ward 8), debated and voted on. It passed 7-6 in a strictly city-suburbs split with Eisenberger joining Councillors Robert Pasuta (Ward 14), Maria Pearson (Ward 10), Lloyd Ferguson (Ward 12 - Ancaster), Russ Powers (Ward 13 - Dundas) and Brad Clark (Ward 9) on the losing side.

Councillor Sam Merulla (Ward 4) moved to ask for a similar report on the other area rating categories (culture and recreation, fire services, and slot machine revenue). That passed 8-5 with Councillor Clark joining the winning side. Councillors Bernie Morelli (Ward 3), Dave Mitchell (Ward 11) and Margaret McCarthy (Ward 15) missed the two votes.

Both of these will come back up tonight (Wednesday) at city council and will likely generate another big debate. Assuming that Councillors Mitchell and McCarthy will vote against asking for the staff report and that Councillor Morelli will stick with the urban councillors, the division may be 9-7 or 8-8 depending on Councillor Clark.

An 8-8 vote loses.

Area Rating for Transit

I don't know a lot about the area rating arrangements for culture and recreation or for fire services, but I have tried hard to understand the area rating system for the HSR and I believe it needs to be phased out.

Staff investigations did not turn up a single municipality in Ontario which has a system similar to Hamilton's where parts of the urban area pay a different tax rate for transit than other parts of the urban area.

There are examples of municipalities which differentiate between rural and urban areas, but none that differentiate between urban and urban like Hamilton does. Not surprisingly, where there is a rural-urban division, the rural area pays much less and in some cases is not levied at all for the transit system.

I believe our current system is unfair, bad for transit, bad for Hamilton and bad for the planet.

I'm particularly worried because improving the HSR is the single best way that the City of Hamilton can address global climate change. The science of climate change gets scarier by the day, with leading scientists now warning that we are very close to a point of no return beyond which we will be unable to stop a runaway warming process whose consequences are catastrophic and could mean the end of civilization.

The current area rating system charges the average ($179,000) home in old Hamilton $165 a year in HSR levy. This is almost exactly five times the levy imposed on the same value home in Ancaster ($34). The numbers for Dundas are $41, for Stoney Creek $53, and for the tiny part of Glanbrook that pays transit levies, it's $70 per average value household. Flamborough (including Waterdown) pays no HSR levy at all - and has no HSR service.

We need to phase out area rating for transit. It's the fair thing to do, it's the right thing to do, and it's the best thing to do for our city.

I'm sitting in Stoney Creek, paying less than a third the HSR levy of my neighbours in Hamilton, but getting just as much service as them, and more than many of them. This is indefensible.

But there's something worse than not phasing out area rating for transit. That's refusing to even look at the facts before making a decision. The resolution today was not to get rid of area rating or even to modify it. It merely asked for a staff report on the implications.

Don McLean is chair of Friends of Red Hill Valley and coordinator of Citizens at City Hall, a volunteer group that has monitored city affairs since 2004 and distributes free news articles via email. The group can be contacted at


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By jason (registered) | Posted September 12, 2007 at 22:00:54

If they're so scared to deal with area rating, then let's do the next best thing and apply it across the board. Between 30-40% of downtown residents don't own a car in Hamilton. They should be allowed to skip the portion of their tax bill that deals with road construction and maintenance. Could you imagine the outcry in the burbs if that ever happened?
Yet, that is exactly what has happened with transit. I don't care if a single bus never rolls into Waterdown. They should still have to pay the same amount towards transit that I do. I have neighbours downtown who have never set foot (or wheel) on the the Linc and will never have any reason to use Red Hill.
Why is it that the downtown neighbourhoods have to pay higher taxes than anywhere else in the city and the richer suburbs continue to be subsidized by us?? Most folks in the burbs make their money in downtown Hamilton and then leave the core each day on newly built roads and highways paid for by downtown residents who never use them. Fair is fair. If the burbs want area rating so bad, let's get it on and do it right.

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By Disgusted (anonymous) | Posted September 12, 2007 at 22:24:04

If the burbs are expected to pay more for poorer HSR service, culture and rec, fire and police service than that of old City of Hamilton residents then I'd expect same level of service. Houses in the burbs are assessed at a higher value than in the core. An equivalent house downtown is half the assessment of a house in the burbs.

Nobody in the "burbs" wanted to loose their identity as a community and be melded in with the old Hamilton. When I think of downtown, I think of the downtown in my "suburban" community not downtown Hamilton. It has no appeal to me. I'm down there every week day and can't wait to leave. That's just personal no offense intended, its just not for me.

The only thing that is keeping our assessment equal or slightly positive in this City is the burbs, the old city continues to loose assessment every year.

So Jason, rather than always slamming people in the so-called burbs maybe a more productive use of your time would be spent on trying to mend relationships, see other points of view, maybe think of the entire community for once, move this City forward rather then continue the us and them attitude. There are two sides to every coin, and its always easiest to sit there and take pot shots at people and issues rather then come up with solutions.

The entire City of Hamilton has tremendous opportunity, petty squabbling such as this will never move the City forward and further entrench the burbs vs. old City attitude.

At least Don keeps it professional and reasonable and speaks to the facts as to why public transit is essential for a community to

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By jason (registered) | Posted September 12, 2007 at 22:56:19

obviously I'm not being serious in suggesting we do area rating across the board. I'm using it as an example of how outrageous this situation is. I just checked on the city's tax website and found a few homes in Waterdown and Ancaster that are exactly twice the size of mine (I couldn't find any of similar size and with a similar sized lot so I looked for some that were exactly double). Their tax bill last year was roughly $3,000. Mine was over $2,000. Twice the lot, twice the assessment value, double garage....NOT paying double the tax. I realize this isn't scientific, but I suggest you do the'll never find a home in the suburbs assessed lower than the core. I don't feel the need to address these accusations of 'taking shots' etc.... any shots I took were directed towards the spineless councillors who represent your ridings.
Until someone can provide some cold, hard facts to prove otherwise, I'll continue to call them on the complete unfairness of this system. Dundas Forever signs and Free Flamborough is cute and nice.
But let's talk facts.
I'd happily put those signs on my front lawn downtown if I thought there was a shot at undoing this mess. I'd also have a pile more money in my pockets each year not having to subsidize places like the Meadowlands.

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By seancb (registered) - website | Posted September 17, 2007 at 10:04:44

Getting rid of area rating would be a great first move toward eliminating the "us and them" attitude.

Here's a thought: by area-rating the transit fees in the outlying communities down to zero, the result will be that the HSR can NEVER AFFORD TO EXPAND THERE. The money for expansion has to come from somewhere. If everyone paid the same amount yearly, since the dawn of amalgamation, maybe there would be better HSR service to the outlying communities by now.

I live downtown, and I bike or walk everywhere. I take transit only very occasionally. I drive maybe once a week, and only when I am leaving the city or hauling something that won't fit on my bike trailer. Yet my taxes pay for things that I'll never use (i.e. HSR service to Stoney Creek and sewers/roads in new housing development in Ancaster). If everyone was paying their fair share, none of us would have so much to complain about.

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