by Geordie Gwalgen Dent
Taken off the City of Toronto website
As Toronto nears another election, claims around the cities finances and taxes begin to border on fantasy. In this make believe world, Toronto taxes are too high, the City is in bad need of revenue tools, and spending needs to be reigned in.
Almost all candidates are calling for cuts to (or freezing of) tax rates while the sale of money making assets remains on the table. Ford has called for keeping taxes low and pointed to his fictitious savings of $1 billion. (Even if this were true, his predecessor, David Miller saved $1.8 billion according to Ford’s math.)
As previously reported in Media Co-op, the effect of most of these policies is that the City’s rich, property owners are being prioritized over the poor who rent or rely on City services.
Taxes
The biggest red-herring in Toronto elections is the claim that Toronto taxes need to be reduced or stabilized. Taxes in the City of Toronto are the lowest in the region according to the city’s own statistics and could easily be increased to levels in other municipalities.
Besides property taxes, the most talked-about tax in the City is the land transfer tax. This tax kicks in when someone buys a house. Stintz, Ford and Soknacki have all called for this tax to be reduced, even though it is the perfect time to have such a tax!
Toronto’s overheated housing market has been one of the fastest growing in the world, with speculation and price increases continuing despite concerns about a bubble. The land-transfer tax focuses on the wealthiest with lots of ‘hot money’ to spend in Toronto. Some could argue that it could even stand to be increased, especially given all the new buildings and condos that have been the most subject to speculation.
Major Funding Priorities
The biggest drain on the City budget, by far, is the bloated Toronto Police Services, who eat up a larger and larger share of City revenues every year, with the Toronto Transit Commission (TTC) a distant second. But the most contentious issue has been the Scarborough Subway. Three motions to defer or stop funding of the Subway were ruled out of order and did not go to vote during the last council.
Concerns about future cost-overruns have been raised, along with the needs of Scarborough residents. City Council has opted to go ahead with the subway which will, according to the City Managers office, lead to a tax increase of 1.6% phased in over three years. The resulting City debt requirements will not increase debt service above the “15% of property tax revenues interest-payment ceiling” to fund increased transit and repairs to Toronto Community Housing Corporation (TCHC) properties. However, the three-stop subway is eating into a lot of spare cash, which is why both Chow and Soknacki have vowed to axe it and go back to the fully funded seven-stop LRT.
Currently, the City has been trying to convince the Province and Federal governments to kick in money for both TCHC and the TTC. According to the City Managers office they have requested new funding tools from the Province along with “a 1/3, 1/3, 1/3 funding partnership with the federal and provincial governments to address the TTC’s $2.5 billion and the TCHC’s $2.6B capital backlogs.”
Assets
One of the most contentious proposals has been the (partial) sale of Toronto Hydro. Stintz has come out in favour of a 10% sale while Tory has rejected any ‘fire sale’ of City assets.
Unfortunately, Toronto has a recent history of fire sales. Enwave Energy Corporation was expected to start turning a profit in coming years for the City. Sadly the City sold it off in 2012 to Brookfield Asset Management who will likely be making huge profits in the future.
Why would you sell part of a company that will provide $50 million to Toronto in the years to come, especially with increasing hydro costs? Well, that probably depends on who’s buying it and who will profit from the sale.
Will candidates talk about increasing Toronto taxes in line with other municipalities? Will any candidate talk about putting more of a burden on property speculators who are making a killing on condo developments while raising housing costs?
Will candidates talk about mandating affordable housing units in all new condominiums (which Toronto has the power to do)? Will anyone talk about providing more daycare spaces or community centres? Libraries? Parks? Culture and arts?
Or will candidates continue to focus on the wishes of the rich and ignore the needs of the poor?
Reprinted from Toronto Media Co-op
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