Toronto Mayor David Miller took his two pet taxes before his sympathetic executive committee yesterday, but faced the expected icy blasts from groups representing automobile owners, real-estate agents and business owners.
But despite withering criticism of the two proposals - a tax of up to 2 per cent on home purchases and a $60 levy on motor-vehicle ownership starting next year - the committee gave its unanimous approval late yesterday.
"Nobody ever wants to have to raise taxes, but this city was set up in a structurally unsustainable way," Mr. Miller said after the vote, saying the money would be used to fix roads and invest in public transit. But he conceded that some of the new tax revenues next year would go to balance the city budget.
The tax proposals now move to city council for adoption next month. For now, the mayor's allies feel confident since they see little sign of a popular backlash.
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While mainstream groups such as the Toronto Board of Trade yesterday spoke against any new taxes, in private talks with the mayor's office they have agreed to disagree without becoming hostile to Mr. Miller's broader agenda.
However, one substantial stumbling block remains even if council approves the new taxes: The city still lacks agreement from the province to administer the motor-vehicle tax.
Yesterday, critics took aim at the tax proposals as unfair, and, at best, premature.
"To pick on 5 per cent of taxpayers [those likely to pay the land transfer tax] to fund the needs of 100 per cent of the people is wrong," said William Johnston, a spokesman for the Toronto Real Estate Board, calling the proposals "unfair and short-sighted."
If imposed, Toronto would be the only city in the province allowed to piggyback its own land transfer tax, worth $300-million a year, on the provincial system.
First-time buyers of new homes and condos would receive a rebate of up to $2,000, which means they would not pay the tax on a home valued at $227,000. But a buyer of a $400,000 home would pay $4,475.
Toronto Board of Trade president Carol Wilding warned that the taxes "will erode our economic competitiveness."
Over the next few weeks, lobbying against the taxes is expected to intensify.
The Toronto Real Estate Board and the Toronto Board of Trade have sent e-mails and contacted councillors directly, but one member of the executive committee expressed surprise at the lack of public outcry to date.
"It's strangely quiet, as if the natives are at the wall but not upset enough to challenge the current approach," said Councillor Brian Ashton (Scarborough Southwest).
Councillor Chin Lee (Scarborough-Rouge River) said he has received close to 700 calls or e-mails, including form-letter protests. "Nobody likes it. I have not yet met a single person who thinks it is justified," he said. If the proposed taxes are not adopted, chief financial officer Joe Pennachetti told the committee, the city would have to raise property taxes on homeowners by 18 per cent and by 6 per cent on business and industry next year.
Taxing home sales
The proposed municipal land transfer tax would raise the closing costs to buy a $600,000 home by $8,475.
| Current estimated closing costs | |
| Legal fees + GST: | $1,270.94 |
| Registration fee for deed and mortgage: | $141.20 |
| Provincial land transfer tax: | $8,475.00 |
| Total: | $9,887.14 |
| Proposed tax | |
| Municipal land transfer tax: | $8,475 |
| New total: | $18,362.14 |
SOURCE: ROYAL LEPAGE REAL ESTATE SERVICES, JOHNSTON & DANIEL DIVISION
