Ottawa still taxes your building on what it was worth in 2016

Ottawa's 2026 tax ratio for an office building is 2.39. Industrial is 2.26. A shopping centre is 1.55. Residential is 1.00.

Council approved those ratios this year. The assessed values they get multiplied against were set on January 1, 2016.

Your 2026 commercial tax bill is a current-year ratio applied to a ten-year-old number, and almost nobody I talk to has checked what it does to them.

The valuation date has not moved in ten years

MPAC is supposed to reassess every Ontario property on a four-year cycle. The January 1, 2016 valuation date was built to carry the 2017 through 2020 tax years and then hand off.

It never handed off. The 2020 update was postponed for COVID. In August 2023 the province filed a regulation extending the postponement through the end of the 2021 to 2024 cycle. Then 2025 came and went. Taxes for the 2026 tax year are still calculated on fully phased-in January 1, 2016 values. The Ministry of Finance says it is reviewing the whole assessment and taxation system, which is the polite version of nobody having decided what happens next.

For a house this is survivable, because Ottawa residential values have mostly moved together since 2016. Commercial is a different animal. The three main asset classes went three different directions over the same decade, and the tax system still pretends otherwise.

The ratio is doing work the assessment can't

The 2026 Ottawa table as approved:

• Residential: 1.00
• Multi-Residential: 1.20
• Shopping Centre: 1.55
• Commercial: 1.97
• Large Industrial: 2.03
• Industrial: 2.26
• Office Building: 2.39
• Landfill: 2.76

A ratio is a multiplier against the residential rate. Same assessed value, ratio of 2.39, you pay 2.39 times what the house pays in municipal tax.

Look at what that produces. An enclosed shopping centre sits at 1.55. A standalone six-unit strip plaza on Merivale sits in the Commercial class at 1.97. Same retail, same city, and the small landlord carries a multiplier 27 percent higher than the mall.

That is not a drafting error. The optional classes were built for a retail world with anchor tenants and mall economics, and nobody has revisited them since. Plain-English version of the class differences is in retail vs office vs industrial.

Office gets hit from both sides

Office Building carries the highest ratio in Ottawa outside of landfill, at 2.39. That was defensible in 2016, when a downtown tower was the safest income stream in the city.

It is not 2016. Ottawa office vacancy hit 15.0 percent in Q2 2026, the fourth consecutive quarter of increases, on roughly 120,000 square feet of negative net absorption. What that did to lease terms is the 61-month lease story. What it did to values is the Bay building at $65 a foot.

So the office owner pays the top ratio in the city, on an assessment struck when the building was worth materially more, while handing back free rent and improvement allowances to fill a floor. Those packages are broken down in the tenant inducement post.

The tax line is priced off 2016 income. The income is 2026.

Industrial is the quiet winner

Nobody on the industrial side is complaining about the freeze, and it is obvious why. Ottawa industrial vacancy is running near 2.5 percent. Net asking rents were about $16.35 a foot in Q1 2026 per CBRE, with Colliers putting average asking closer to $16.75. Not 2016 numbers. Why small-bay space is impossible to find is the industrial squeeze post.

Industrial carries a 2.26 ratio, a notch below office, applied to a 2016 value in the class that appreciated hardest over the decade. On an effective basis it is the most under-taxed commercial asset in Ottawa. If you own it, that is a subsidy you are quietly collecting. If you are buying it, do not capitalize that subsidy into your offer.

Reassessment is not a refund

This is where most owners get it wrong.

When reassessment lands, it does not change how much money the City collects. It is revenue neutral by design. Council sets a budget, the assessment base is whatever it turns out to be, and the rate is adjusted so the total lands in the same place.

What reassessment does is reallocate. Inside a class, you pay more only if your property gained more than the class average, and less only if you lagged it.

So the office owner treating a future reassessment as a rebate is right only if their building fell harder than office as a whole. If every office in Ottawa dropped 30 percent, the rate rises to compensate and your share is unchanged. Relief comes from the shift between classes, not from the drop in your own number.

The industrial owner assuming nothing changes carries the real exposure. If your building doubled since 2016 while the class went up 60 percent, you absorb the shift when the freeze breaks.

The one piece of live relief

Ottawa's small business tax subclass is new and it is real money.

Eligible properties get a 15 percent reduction on the municipal portion, phased in over two years, and the Province has said it will match the 15 percent on the education portion. It shows up on the Final Tax bill, and on the ratio table as the Small Business Subclass set at 85 percent of the class ratio.

It is automatic. The City used MPAC data on tax class, property size and property code to build the qualifying list. Commercial class, under 25,000 square feet, is the general shape of it. No application.

Automatic is exactly the problem. If MPAC has your property code or square footage wrong, you are not on the list and nobody is calling you about it. Qualifying owners get a Property Assessment Notice from MPAC near year end plus a letter from the City. If you own a small commercial building here and got neither, call Revenue Services.

What I would actually do

Pull your assessment and confirm what class and subclass you are in, not what you assume. The Commercial versus Shopping Centre split alone is a 27 percent difference in multiplier.

If you are under 25,000 square feet in the Commercial class, verify you are on the small business list. That is the only relief on the table right now.

If you are buying, underwrite the tax line twice. Once at the 2016-based number, once at something closer to today's value. A ten-year-old assessment is temporary, and the buyer who treats it as permanent gets surprised later. That gap is widest on industrial, which is where people are bidding hardest.

The Request for Reconsideration deadline for the 2026 tax year was March 31, so this year's window is closed. Put next spring in the calendar.

The assessment is a decade stale, the ratios were written for a different retail economy, and the two errors do not cancel out. If you are weighing a purchase, a renewal or a reassessment challenge and want the numbers run on your actual building, not a class average, call me at 613-262-6545 or email fil@613realtor.ca. You can also see what is currently listed.