Budget 2023: Frequently Asked Questions

We understand that this year's final taxes increase is higher than in previous years.

The City's final tax bill includes levies from the City, the Region, and the Province, with the City only controlling the City portion. Council faced tough decisions during 2023 budget deliberations and reduced the proposed increase of 10% to 7.9%.

Although the increase is much higher than in previous years, the City of Niagara Falls has a very low tax rate compared to other municipalities in the Niagara Region. It is the lowest of the three municipalities with professional Fire Service. Specifically, the City of Niagara Falls has the 8th lowest tax rate out of the 12 municipalities in the Niagara Region.

Municipality2023 City Levy
Port Colborne$ 2,876
Wainfleet$ 2,195
Welland$ 2,176
Fort Erie$ 1,962
Thorold$ 1,919
St. Catharines$ 1,868
Pelham$ 1,636
Niagara Falls$ 1,598
Lincoln$ 1,398
West Lincoln$ 1,191
Grimbsy$ 1,106
Niagara on the Lake$ 751
Average$ 1,723

These figures are based on a median residential assessment of $279, 854.

Each year the City invites input into the budget process, and we encourage you to look for this opportunity on Let's Talk Niagara Falls this Fall so that your input can help shape the budget next year.

What is the City Portion of the Tax Bill?

The City portion of the tax bill is 38%.

For residential properties, the City's portion of the tax levy saw an average increase of 7.9%, including a 0.5% increase to our capital levy. This is one of the largest increases the City has made in several years. The need for an increase was a result of a few key factors:

  • Many years of minimal tax increases between 2017-2022. Even with this year's more considerable increase factored in, the average tax increase during these seven years is still only 2.8% per year.
  • Provincial legislative requirements for Asset Management to address financial pressures related to aging and growth-related infrastructure were established. This requires the City to set aside funds to replace assets as they age and fail. This includes all City assets like buildings, pools, roads, sidewalks, and sewers.
  • Provincial Bill 23, More Homes Built Faster Act, required the City to hire more Planning staff; and
  • Rising costs (post-COVID) for goods and services we use, like asphalt, gas, wood, supplies, labor, and contracts. As we know, inflation increased significantly, and though our tax increase of 7.9% was unusually high, it was in line with the inflation rate.

These factors put the City in a position where a “catch-up” period was necessary to keep pace with inflation and provincial legislation.

What is the Regional Portion of the Tax Bill?

The Regional portion of the tax bill is 52%.

The Niagara Region's portion of the tax bill previously consisted of the Regional levy and the Waste Management Levy. New in 2023, with the amalgamation of Transit, Transit revenues, and expenses have been removed from the City and Regional Levies and are included on a new Regional Transit Levy.

The Niagara Region approved a 7.58% increase to the Regional Levy and a 5.5% increase to the Waste Management Levy.

How much of the tax bill goes to education?

The Province of Ontario controls 10% of the tax bill for the Education Levy. The Education levy remains the same as in 2022 and has not changed for four years (2020-2023).

What is the total tax increase in 2023?

Combined with the approved increases from Niagara Region for the Regional Levy, Waste Management Levy, and the new Transit Levy, total annual taxes have increased by 11.8% for households inside the Urban Service Area and 16.6% for households outside the Urban Service Area.

Why is the increase for households outside the Urban Service Area larger than households inside the Urban Service Area?

Historically for the City of Niagara Falls, Transit Services have always been charged as part of our Urban Service Area levy, meaning that households outside the Urban Service Area have never seen a charge for City of Niagara Falls Transit Services on their tax bill.

As of 2023, with Transit being a Regional levy, it is charged to every household, including those outside the Urban Service Area.

What will the tax increase cost the average residential homeowner?

The average residential homeowner, with a home assessed at $279,854 in value, within the Urban Service Area will pay a total of $4,211.98 in taxes in 2023. This represents a $445.10 increase from 2022.

The average residential homeowner, with a home assessed at $279,854 in value outside of the Urban Service Area, will pay a total of $4,153.58 in taxes in 2023. This represents a $590.77 increase from 2022.

Tax bills were mailed on June 8th and are due on June 30th. Are any payment options available to spread the payments without penalty and interest?

Yes! The City of Niagara Falls offers a Pre-Authorized Tax Payment Plan option where taxpayers can sign up to have payments automatically deducted from their account once a month (on the 16th of the month). Sign up by July 7th, and staff can spread the cost of the 3rd and 4th installment payments (due June 30 and September 30) over six months, with the first payment starting July 16, 2023, and no penalty and interest. Any returned payments (NSF, etc.) will be subject to penalty and interest.

To apply, download the Pre-Authorized Tax Payment Plan form.

Contact the Finance Department at [email protected] or call Anna D'Amico, Tax Clerk, at 905-356-7521 ext. 4309 for more information.

What is the Transit Levy?

As of 2023, Transit services of $11.6M were removed from both the City's portion of the tax bill ($8.1M in 2022) and the Region's portion of the tax bill ($3.5M in 2022) and added as a new Transit Levy on the tax bill ($14.5M in 2023).

The new Niagara Transit Commission made several different funding decisions than the City had previously made, including an increase in allocations to capital funding and the removal of the majority of Provincial Gas Tax Funding that the City had included as a subsidy for lost fare revenues due to COVID-19, which largely explains the $2.9M increase in Transit funding for the City of Niagara Falls residents as compared to 2022.

Visit the Niagara Transit Commission for more information.

How are property taxes calculated?

Property taxes are based on the tax rate as it applies to the assessed value of a home or property. The Municipal Property Assessment Corporation (MPAC) generates a current value assessment for all properties. This assessment is used to generate property tax amounts.

A combined tax rate of municipal (City, City Capital, and Urban Service Area), Regional (Region, Transit, and Waste), and Educational taxes is multiplied by the current value assessment to determine a property's tax value. Within the combined rate, the City and Niagara Region independently determine the tax rate for each property tax class. The Province of Ontario sets the educational tax rate for all properties.

Who is responsible for setting the property tax rates?

The City establishes a budget each year to provide municipal services and infrastructure.

The budget sets out the funds to be raised from property taxes.That amount is divided amongst the total taxable assessed value of all eligible properties in Niagara Falls.

The taxable assessed value of each property depends upon its tax multiplier, which is set each year by Region and follows guidelines set out by the Province.Farm and forested lands generally pay 1/4 of the taxes of a similarly assessed residential property. In contrast, commercial properties pay a higher rate of taxes than similarly assessed residential properties.

For more information, visit the following pages:

Why is the 2023 final tax rate approved in May?

The 2023 Tax Rate Report, passed by Council on May 30, 2023, follows the normal municipal budgetary process. The report combines the rate set by the City during its budget process in January 2023 with the rates set by the Niagara Region and the Province of Ontario.

City tax rates are determined by the revenue required to fund the City's operating budget. The City finalized its rate by passing the 2023 Operating Budget at the City Council meeting on January 31, 2023.

A finalized combined rate could not be generated until the Niagara Region and the Province of Ontario finalized their rates for 2023. The Province finalized the education portion of property taxes on Dec 19, 2022, and Niagara Region finalized the regional portion on May 18, 2023. After these rates were finalized, the City was required to ratify a combined rate for 2023 property taxes.

Where does the property tax money go?

Property tax revenue funds various government programs, operations, and services.

The Province of Ontario uses the educational tax portion to fund school boards in Niagara.

To view more detailed information, view the following links:

Are there any programs to assist seniors financially?

Annually City Council approves a program for low-income seniors. Specifically, the City has a program for property tax owners aged 65 and over receiving the Federal Guaranteed Income Supplement. Staff is working on revamping this program to provide more relief and will present options to Council at the July 11, 2023, Council meeting. The program typically launches annually in August, with applications due in October.

Where does the money from growth go?

New taxation revenue from annual growth (i.e., new properties added to the assessment base) is added to the City's budget and offsets the amount needed to raise from taxes.

Where does the funding from the Casino go?

For more information on where the funding from Ontario Lottery & Gaming (OLG) is applied, please visit the OLG Funding and Commitments page.

Why did the City not use OLG funds to subsidize the tax increase?

The City uses OLG funding to subsidize the tax levy; the 2023 budget includes $5,090,000 of OLG funding. This subsidy would result in a further 5.99% tax increase if removed all at once. Please refer to the OLG Funding and Commitments page to see the amount of OLG funding used annually since 2013 for tax relief, among other OLG funding uses. From 2013-2022 the City has used $52,800,903 as a subsidy to the levy.

Most OLG funds are used for capital projects like parks and roads. It is not a best practice to include OLG funds as a subsidy to the tax levy due to the uncertainty of the amount annually.

During COVID, the Niagara Casinos were fully closed for 18 months and partially open for another period of time. This resulted in a loss of more than $300 million in revenue to the City, presenting yet another challenge for the City to deal with. The receipt of OLG funds based on our municipal agreement has returned to approximately 80% of pre-COVID levels. With the introduction of online gaming, staff are not expecting a return to 100% pre-COVID levels.

The “Explanation of Tax Changes” section on the Final Tax Bill indicates that properties have a 2023 Tax Change due to Reassessment. Didn't the Ontario Government postpone the 2020 Assessment Update?

Unfortunately, there was a printing error on the following four lines:

  • 2023 Local Municipal Levy Change
  • 2023 Upper-Tier Levy Change
  • 2023 Provincial Education Levy Change
  • 2023 Tax Change Due to Reassessment

Explanation of Tax Changes correction

These four lines highlight the changes in tax levies between the Municipal, Upper-Tier, and Provincial Levies compared to the year before. When adding the four lines together, this amount indicates the total year-over-year change in your tax levy. This total amount is correct. However, the distribution between Municipal, Upper-Tier, Education, and Reassessment needs to be corrected.

City staff are working to correct this issue. If you would like staff to calculate your year-over-year change for each levy, please get in touch at [email protected] or by telephone at 905-356-7521 ext. 4400 Monday to Friday from 8:30 a.m. to 4:30 p.m.