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Tax Increment Equivalent Grant (in Municipal Finance)

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PPGPortal > Home > Concept Dictionary > T, U, V > Tax Increment Equivalent Grant (in Municipal Finance)
 
Tax Increment Equivalent Grant (in Municipal Finance)

An incentive to encourage economic development whereby a tax increment (part or all of the annual tax increase over specified period like 10 years) is returned to new businesses as a grant.

(Slack, Enid. Lecture. Institute on Municipal Finance and Governance, University of Toronto. Fall 2008.)

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Tax Increment Equivalent Grants (TIEGs) are attractive to municipalities in Ontario because they are the only way to subsidize development under the provincial Planning Act. Part or all of a municipality is designated a community improvement area in which all new economic development, or specific sectors, are eligible to receive the TIEG. For qualifying businesses that locate in the area, the municipality will take the tax increment – part or all of their annual tax increase – over a period like 10 years and return it to them as a grant. Detractors of TIEGs argue that they simply force the rest of the municipality’s taxpayers to subsidize businesses, many of which would have probably come anyway.
     
Tax Increment Equivalent Grant (in Municipal Finance)

An incentive to encourage economic development whereby a tax increment (part or all of the annual tax increase over specified period like 10 years) is returned to new businesses as a grant.

(Slack, Enid. Lecture. Institute on Municipal Finance and Governance, University of Toronto. Fall 2008.)

---------------------------------


Tax Increment Equivalent Grants (TIEGs) are attractive to municipalities in Ontario because they are the only way to subsidize development under the provincial Planning Act. Part or all of a municipality is designated a community improvement area in which all new economic development, or specific sectors, are eligible to receive the TIEG. For qualifying businesses that locate in the area, the municipality will take the tax increment – part or all of their annual tax increase – over a period like 10 years and return it to them as a grant. Detractors of TIEGs argue that they simply force the rest of the municipality’s taxpayers to subsidize businesses, many of which would have probably come anyway.

Approved for glossaryposting by Ben Eisen on January 27, 2011


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© University of Toronto 2008
School of Public Policy and Governance