An Ontario Superior Court of Justice ruling on Toronto’s contentious billboard tax is expected to save Canada’s out-of-home and digital out-of-home companies millions of dollars.
The ruling came last week following appeals brought both by the Out-of-Home Marketing of Canada Association and by the Pattison Outdoor Advertising LP/Pattison Sign Group. They took legal action against the City of Toronto to quash the Third Party Sign Tax Bylaw imposed on the outdoor advertising industry that would have seen $10.4 million in tax on the outdoor companies – “more than their total revenue”, Rosanne Caron, president of OMAC, said at the time.
The new ruling states the tax will only apply to signs that were erected in Toronto after April 6, 2010, when the existing outdoor signage bylaw took effect. All signs erected before then are exempt. (The City of Toronto proper is the only area affected. External cities in what is referred to as the Greater Toronto Area are not affected.)
“Naturally, we’re pleased with the ruling,” says Caron. “It will only mean taxes of less that $1 million, as there have been only between 30 and 40 new signs put up since the law went into effect. And there aren’t likely to be many new ones put up, because the laws are so restrictive. If all the existing billboards had been taxed as the City of Toronto wanted, it would have crippled the industry.”
The city wanted to use 20% of the tax for administrative costs re enforcement of the laws on the OOH or DOOH (which OMAC was willing to handle itself) and the remaining 80% was earmarked for art and beautification of the city.
Toronto had ignored the OOH companies’ own audited revenue figures in pushing through its bylaws on the tax and erection of billboards.
In Nov./10, OMAC ran an advertising campaign with the message “How can the City tax an industry more than it earns?” and two similar messages displayed on 139 vertical and horizontal poster and digital billboards across Toronto to bring awareness of the situation to the public.
There’s been no indication so far as to whether the city will appeal the recent judge’s ruling – which, we’re sure, would again be fought by OMAC, if necessary. In fact, we wouldn’t be surprised to see OMAC now take on other aspects of the city’s billboard laws.