A compromise deal on new Toronto taxes, fashioned yesterday after a flurry of negotiations that won a crucial endorsement from the Toronto Board of Trade, goes before city council on Monday.
The eleventh-hour diplomacy, amid intense lobbying of councillors before the expected close vote, came the same day 10 top condo developers endorsed changes to soften the impact of Mayor David Miller's controversial tax plan on middle-class homeowners. His plan also includes a $60 fee for motor vehicle registration.
Last evening, in a move expected to boost the mayor's effort to bring together his badly divided council, the Board of Trade released a statement praising a modified tax plan released by Councillor Mark Grimes (Ward 6 Etobicoke-Lakeshore) after day-long talks with the mayor's office and the board.
The reworked plan "is a reasonable compromise under the circumstances to see Toronto through the 2008 budget crisis," said board president Carol Wilding in a statement that said her organization still opposes the city-imposed land transfer tax in principle.
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Mr. Grimes was elated. "I am hoping councillors will look at the compromises seriously," said the councillor, who had balked at the mayor's original plan put to council in July and deferred to this Monday. "It's the best we are going to get."
Several recommendations on his nine-point list, which he circulated late yesterday to other councillors, seek to mollify business opposition to the taxes.
They include a 1-per-cent cap (down from 1.5 per cent) on commercial sales valued between $55,000 and $400,000, a pledge that the tax revenues will be spent on new municipal infrastructure (assuming the province uploads social services) and a faster phase-in of business tax-rate reductions (to 10 years from 15 at present).
Meanwhile, the mayor released a letter signed by most, but not all, of the city's major condo developers that supports changes to the land transfer tax as it applies to homeowners.
"I'm quite comfortable with the amendments; they are reasonable and appropriate," said Mr. Miller, whose office consulted closely with Mr. Grimes and the developers.
The changes include a full rebate for all first-time home buyers, a 1-per-cent cap on the tax as it applies to homes valued between $55,000 and $400,000, and an exemption on all purchase and sale agreements signed before Dec. 31.
"We are hopeful that with this compromise, council can move forward to continue maintaining and building this great city," the developers wrote, also asking the provincial and federal governments for "a more equitable sharing of tax dollars for the city."
The letter was signed by Menkes Developments Ltd., Minto Urban Communities, Diamondcorp, TAS DesignBuild, Lanterra Developments, Greenco Project Management Ltd., Daniels Corp., Castlepoint Realty Partners, Tribute Communities and Context Development Inc. Industry sources say two major condo developers, Tridel and Monarch, were absent from the list.
One developer who signed the letter urged undecided councillors to embrace the changes. "This is not an issue about taxation," said Niall Haggart, vice-president of the Daniels Corp. "This is an issue about city finances and how to get a sustainable model so we collectively can contribute to this wonderful, vibrant city."
The letter infuriated opponents of the mayor's tax plan.
"You can't compromise when it comes to making home buyers pay for a cost that should be spread more broadly," said Stephen Dupuis, the president of BILD, the Toronto-area home builders association, which has lobbied hard against the land-transfer tax and whose membership include the 10 developers.
Councillor Denzil Minnan-Wong (Ward 34, Don Valley East), a tax critic, describes the developers' move as "a self-serving initiative" as many of the units they sell would be spared from the tax.
If adopted, the revised tax would knock up to $50-million off earlier revenue estimates of $300-million for 2008.
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