In 2015, it was announced that federal climate change benchmarks were not being achieved at the Paris Global Climate Conference. Therefore, new emission reduction goals were created. The Government of Ontario declined to create and implement a provincially run carbon tax program, so the federal government implemented a federal carbon tax in Ontario.
And although the additional tax was originally aimed at large fuel corporations and industrial facilities, the higher taxes have ultimately been passed along to the Canadian consumer, including those who own condos in Ontario.
How the Ontario Carbon Tax Impacts Condo Boards & Owners
When the federal government passed a law introducing a carbon tax that started on April 1, 2019, condo boards and owners were warned that the impact of the carbon tax would be significant. In fact, condo boards were told that common expenses would be on the rise and that the impact of carbon tax on condos would mean that this tax increase would need to be accounted for in future budgets.
This new federally imposed carbon tax in Ontario has since impacted condominium boards and owners in a variety of ways. Here are some of the ways that the carbon tax is affecting Ontario residents who own condos or have a supporting role in managing them.
Rising Utility Costs
The introduction of Ontario carbon tax has caused an increase in condo utility costs. The electricity and heating bills for a typical high-rise condo have increased from 4.4 cents to approximately 11.5 cents since the implementation of the carbon tax. This adds up to $35,000 annually, creating financial challenges for condo boards.
Increased Cost of Living
The addition of a carbon tax causes fuel prices to increase. When fuel prices rise, it affects the entire economy and the general cost of living in an area. From getting groceries and other consumer products to fueling your personal vehicles, the cost of fuel has a direct effect on the local economy including those who live in condos in Ontario. The increased cost of living from the introduction of a carbon tax may make condo living seem unattainable for the average Ontario resident.
Less Budget Flexibility
Condo boards will have a lot less budget flexibility due to the direct increase in the costs of maintaining the condominium building, grounds, and amenities. The cost of services will increase, leaving less money in the budget for amenities, etc. As a result, a more strategic approach to budget management will have to be taken to make the most out of condo finances.
Higher Condo Fees
One of the most noticeable increases of the impact of carbon tax on condos is the higher HOA and condo fees owners will face. Monthly and/or annual fees will most likely increase to accommodate the cost of the carbon tax. Higher condo fees may cause Ontario residents to look for alternative living arrangements, damaging the real-estate market for condos.
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