Old Muskokans taxed out by new money
By ANTHONY REINHART
Globe and Mail, June 24, 2004 - Page A13
ROSSEAU, ONT. -- When Ben Beley left England for a fresh start in a brand-new country, they were giving the land away.
There were conditions, of course, when Mr. Beley arrived here in 1867 to claim his share of Crown land high on a rocky outcrop overlooking Lake Rosseau. He had to clear it and settle there, but he did so gladly, sleeping in a log cabin as he worked to erect a solid and sensible two-storey Georgian house for his family.
That house still stands today, but it looks decidedly out of place through the designer sunglasses of the boaters below, as they speed past shoreline that now sells, in some cases, for $4,000 a foot.
Bob Topp, 70, sees the old Georgian his great-grandfather built every time he leaves his cottage on Channel Island. Across the lake, he can also show you more than a mile of shoreline still held by scores of descendants on his mother's side of the family.
More than anything else, though, Mr. Topp can see what new money is doing to old Muskoka. And nowhere is it more evident than on the property-tax bills he and his waterfront neighbours have faced, with increasing alarm, over the past decade.
"It's unquestionably causing serious financial difficulty for a lot of people," says Mr. Topp, a Toronto accountant who retired two years ago, but now works full-time fighting what he calls a "disease" -- waterfront taxes that have grown out of all proportion to the cost of the local services they fund, and in many cases, the owner's ability to pay.
Financial difficulty is the last thought that springs to mind on a cruise of Lake Rosseau, which rounds out cottage country's Big Three, with Lakes Joseph and Muskoka, when it comes to prestige.
Grand boathouses with ample guest quarters jut out over the black water, announcing even grander summer homes that rise from the trees behind them. Many of the newer ones stand as multimillion-dollar monuments to Toronto's nouveau riche, while others offer luxurious refuge to the likes of Kurt Russell and Goldie Hawn, who, despite complaints about the prying eyes of tourists, have made little effort to conceal their compound on Rosseau's eastern shores.
Less obvious, Mr. Topp says, are the many older cottages that families of more modest means, like his own, have enjoyed for generations, gauging their worth solely on the good times they've provided.
"I know lots of people who are not investing," he says. "They're there because it's a family place, there because they love it, and they hope they can leave it to their kids."
Such hopes were easily realized during the century that followed early settlers such as Mr. Topp's great-grandparents, whose substantial land holdings remained in family hands, subdivided over time as the number of descendants grew.
As these arrangements became more complex, some bought additional lots to relieve the pressure.
In Mr. Topp's case, his father bought four-acre Channel Island for a song in 1943, when islands were out of favour. For years, it served as little more than a campsite for young Bob and his friends, until he married in 1967 and built a modest place of his own.
Taxes were $12.95 in 1950, as shown on an old yellowed bill he keeps in a frame. Last year, they were $6,000, thanks to a sudden surge in demand for waterfront property that began in the early 1990s and has quickened since.
Mr. Topp was far from alone in protesting against the toll market-value assessment began to take on waterfront owners in 1992. First, he joined his neighbours in an appeal and promptly won a 25-per-cent tax reduction. Then he was asked to join the board of the 3,000-strong Muskoka Lakes Association, the largest cottagers group in Canada.
Subsequent assessments soon showed him that "what was developing was two real-estate markets -- one on the lakes, and one not on the lakes," meaning waterfront taxes were rising at a far greater rate than those of inland properties.
Facing growing unrest, Muskoka District Council struck a 19-member task force of local politicians, residents and ratepayers representatives, including Mr. Topp, in the summer of 2001.
They soon came up with numbers that confirmed his observation: Between 1999 and 2001, waterfront property values soared 55 per cent on the Big Three lakes, compared with 20 per cent across the wider district.
The gap, which only continues to grow, means inland owners -- many of them year-round residents -- enjoy artificially low taxes, while the relatively few lakefront owners bear a larger and larger share of costs for municipal services many don't use heavily. Others, such as seniors on fixed incomes and descendants of previous owners, have relinquished chunks of their summers to renters, or given in to the relentless demand, cashed in and given up on old Muskoka.
"If the present system remains unchanged and we simply move ahead, it won't take very long before the waterfront up here is paying 90 per cent of the taxes for the District of Muskoka," Mr. Topp says.
Since assessment policy is a provincial responsibility, waterfront owners found hopeful signs in the new Liberal government's budget this spring, which gave vague but promising hints of reform.
To that end, Mr. Topp has launched a new lobby group called WRAFT (Waterfront Residents After Fair Taxation), to rally owners across Ontario -- from the shores of Lake Huron to Muskoka to the Thousand Islands -- to push those reforms, which could include caps on tax hikes, or a freeze on assessments until properties are sold.
"Something like that would at least prevent any further shift," he says, "and it would be more protection for the future.
In the meantime, he and his neighbours, many of them "average guys," are bracing for their next quarterly tax bill, due next month.
"I guess the story really is of people hanging on."