Property taxes in Hamilton remain higher than those in most medium-to-large-sized municipalities in Ontario — but the city is creeping back towards the average.

According to a new report from city staff, taxes on an average detached bungalow stood just below $3,750 last year — nine per cent higher than the mean for the 16 other cities that were studied. 

But that’s down from a 15 per cent gap in 2004, meaning that property taxes in Hamilton are growing at a slower-than-average rate in comparison to other major cities in the province. The comparison group included large cities like Toronto, Ottawa and Mississauga and mid-sized municipalities such as Oakville, Kingston and St. Catherines. 

Hamilton tax competitiveness study

A chart put out by the city shows the growth in taxes on the average detached bungalow in Hamilton in relation to the average for 16 mid-to-large cities in Ontario. (City of Hamilton)

“It’s not great, but we’re getting there,” said Ward 11 Coun. Brenda Johnson. “Through budgeting and cutbacks and counting our pennies, we’re getting there. So hopefully we’ll get it down to the par, if not lower.”

She credited the findings on council’s commitment to limiting property tax increases while working to maintain current service levels.

Brad Clark, the councillor for Upper Stoney Creek and a contender in the city’s mayoral race, said the city has done a better job of budgeting since he was first elected to council in 2006.

“When people were saying at the time that we were the highest-taxed municipality in the province, it was pretty close to being accurate,” he told CBC Hamilton on Wednesday.

“And through good fiscal management over the last eight years, we’ve been able to get that number down to nine per cent above the provincial average.”

However, Clark said high property taxes may be discouraging potential residents from moving to the city.

“It’s no longer, 'How much is the house? It’s “How much are the property taxes?’ And they’re looking for municipalities that have the lowest property taxes.

“We don’t have the ability to cut taxes, but we can certainly keep are expenses down.”

Homeowners shoulder most of city's tax burden

The tax competitiveness study, submitted on Wednesday to council’s audit, finance and administration committee, identified the loss of industrial tax dollars as a major reason that property taxes remain relatively high.

In the 1970s, during Hamilton’s industrial heyday, the city brought in 40 per cent of its revenue from industrial taxpayers. That number has dropped to 30 per cent, meaning the city now relies more heavily on homeowners to pay for municipal services.

But the city is hamstrung in its ability to raise taxes on industry and commercial tenants because of restrictions that were passed by the province during Mike Harris’s premiership.

So if city hall wants businesses to pay for a larger portion of the tax levy — and by extension, shift the burden off homeowners —  it’ll have to attract more employers to Hamilton, Clark said.

“We have a lot of work to do in terms of bringing in foreign investment and industry into our community.”