Sometimes you have to wonder about city governments and that of Toronto – Canada’s biggest city – is certainly no exception.
For months now, two separate city committees have been dealing with a new proposed by-law and a proposed tax on the out-of-home industry. (See our June 14 article.) And for more than a year now, the Out-of-Home Marketing Industry of Canada – whose members include Astral Media Outdoor, CBS Outdoor, the Outdoor Broadcast Network, Pattison Outdoor and Titan Outdoor – has been trying to consult with the committees to come up with an agreeable solution for all sides.
When it heard that the city wanted to levy an estimated $10.4 million tax targeting the outdoor players, OMAC hired an independent research house to look at the situation and recommend what would make sense. It prepared and delivered three submissions in Oct. /08; Feb./09 and at the end of March that detailed the issues that needed to be addressed and provided recommendations for resolution.
And other than a few basic meetings – “during which there was no consultation,” says Rosanne Caron, OMAC president – there was no response. OMAC heard that the city was hiring an economist to do its own study, as well, but there was also no publication of the findings.
Now, in all its wisdom, the two committees as one have put everything together and on Nov. 4 plan to arbitrarily impose a new by-law, without any consultation with the industry, which includes new taxes, increased fees and the introduction of new fees and regulations OMAC believes are punitive, unrealistic and unfair.
Until now, OMAC has kept relatively quiet on the situation, trying to resolve the situation peacefully, but, yesterday (Oct. 28/09), after receiving a copy of the report, with no attachments to justify the city’s reasoning or recommendations, Caron and OMAC members are, you might say, ‘fightin’ mad.’
“What they are submitting will cripple the out-of-home industry,” says Caron. “It’s scary to see the city going down this path. It will hurt advertisers. It will hurt the city’s own finances. It will hurt small leaseholders. And it will hurt charities who depend on the OOH industry to publicize their efforts.”
One of the chief beefs by OMAC is the $10.4 million tax, still included in the report. That number, says OMAC, is 25% higher than OMAC members total annual earnings of $8 million before deducting interest and taxes and three times the amount recommended in the 2007 Hemson Report. No economic basis for this tax has been presented and only 20% of the tax collected is for administration and enforcement of the new by-law.
“Right now, the city already collects an annual revenue of $36.8 million through its current leases and small private lease holders collect $28.4 million,” says Caron. The Report includes new taxes, increased fees and the introduction of new fees and regulations OMAC believes are punitive, unrealistic and unfair. The draft by-law will severely damage the out-of-home industry, its many dependent stakeholders in Toronto and ultimately reduce income to the City in the form of rent and taxes. OMAC members represent 90% of the outdoor advertising revenue generated in the City of Toronto
OMAC has requested the City of Toronto sign by-law project team defer presentation of its draft by-law to the Planning and Growth Committee scheduled for Nov. 4 and enter into meaningful discussions with out-of-home media companies about an appropriate by-law.
When we talked to Caron today, there had yet been any more contact from the city, nor has there been any response to our own call to the Chief Building Officer who heads the city’s committee. (We’d like to present their thoughts and will do so if we get a response. Ed.)
Interestingly, Toronto’s Mayor David Miller has publicly stated there would be no new taxes!
“We are disappointed the City sign by-law project team chose to shut the industry out of a proper consultative process and is pushing forward with new untested rules and new unsubstantiated taxes that may devastate the industry financially and put at risk significant revenue earned by the City of Toronto as well as many small businesses,” said Rosanne Caron,
OMAC recently sent letters of concern to Toronto Mayor David Miller on September 15, 2009 and to the sign by-law project leader on October 5, 2009. Caron says that neither letter received a response.
“This is not a fair, open or transparent process,” says Caron. OMAC is requesting a deferral of one month to enable all stakeholders to properly review the proposed sign by-law report and for the Planning & Growth Committee to hold a special meeting in December to deal with the matter.
OMAC’s position on the City of Toronto’s proposed harmonized sign by-law and billboard tax can be seen at