Finance Minister Greg Sorbara did a little fiscal tap-dancing this week, shuffling part of the property tax burden from residential taxpayers to business owners. Predictably, this engendered howls of protest from the business community and sighs of relief from homeowners. But who are the real winners and losers here Will these changes increase or reduce tax fairness And are they a potential violation of the Taxpayers Protection Act

Without a doubt, residential property owners in Ontario will take less of a hit - for now. After seeing property values go through the roof, homeowners will be able to breathe easier when the tax bill comes through the door. That resonates particularly well in Toronto and Ottawa, two cities that have seen residential property values and taxes soar in recent years (and which voted overwhelmingly Liberal in the last provincial election).

The bad news, though, is that this isn't tax relief, but tax redistribution. Businesses and rental properties will simply shoulder a greater portion of the overall tax burden. And whenever business taxes go up, everyone ends up paying, in the form of higher consumer prices and lost jobs. None of which helps homeowners when they're buying that gardening equipment, fixing the roof or paying down the mortgage.

Other short-term winners are property developers who build condos and single-family homes, particularly in high-growth Toronto. But with mortgage rates at record lows and new construction at record highs, are lower property taxes really needed right now to lure more homebuyers On the flip side, the biggest losers may be tenants - arguably those who can least afford to pay. Their landlords' bigger tax bill will translate into higher rents, less money for building maintenance, and less apartment construction. It's a little-known fact that tenants in Ontario are already taxed at about twice the rate of homeowners, even though they earn on average half the income. This new announcement does nothing to alleviate that inequity.

Add to that the specter of another class of property taxpayer, the "small business" designation, and the Finance Minister's announcement only compounds the complexity currently plaguing the system. Taxpayers are rarely aware of the rationale behind their mill rates - which makes it that much harder to contest the fairness of their bill. Coupled with constantly changing market value assessment, this produces a recipe for confusion that is handily exploited by municipalities at budget time. By drawing up their budgets first and finding the revenue later, municipalities pit one group of taxpayers against another, inevitably raising rates on the group whose property values increase the most.

The current system of municipal assessment value is bureaucratic, unpredictable, costly to administer, and bears no relationship to the municipal services a property consumes. It taxes capital, not consumption, capital which many homeowners, such as the elderly, may never even see. If the government really wanted to implement tax fairness, it would examine alternative systems based on the use of municipal services. Similar systems have already been implemented in jurisdictions like Britain, California, Florida and Israel, in response to pressure from local taxpayer groups.

Back at Queen's Park, Conservative opposition members are busy examining whether the Minister's announcement violates Ontario's Taxpayer Protection Act. The Act specifically prohibits the government from passing a bill authorizing other bodies, like municipalities, to raise taxes without a referendum. Minister Sorbara indicated that these latest changes will be made by regulation, not legislation. This may not technically violate the Act, but the opposition seems intent on pursuing it nonetheless. A red herring Probably, but taxpayers will see how fast the Minister can dance on that issue when the legislature resumes next week.