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City’s budget chair backs away from cuts to land transfer tax

Mike Del Grande is photographed during the City of Toronto budget meeting at city hall in Toronto, Ont. Feb. 10/2011

Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail

Toronto Budget Chair Michael Del Grande is backing away from plans to chip away at the city's land transfer tax, saying the city's finances are too tight to reduce the levy.

After months of going line-by-line through the city's books, the Scarborough councillor, an accountant, says the city can't afford to reduce a source of revenue expected to bring in $330-million this year.

"My hope was that I would be able to do something," he said Wednesday during a break from council. "It doesn't look like it."

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The problem, Mr. Del Grande said, is not the coming year, but the budget crunch that he sees coming in 2014 just as Toronto voters head to the polls and when Mayor Rob Ford has pledged to freeze property taxes.

"What one would like to do and what one can do are two different things," Mr. Del Grande said. "I have a fundamental responsibility not to sugar-coat anything."

Mr. Del Grande expects budget talks for 2013 will begin with an operating shortfall of about $200-million. The city's finances will get worse in 2014 because of a number of factors that will kick in that year. Two reserve funds that have been used to fund daycare spots and services provided by the shelter and housing department will run out and other changes to provincial funding for programs such as Ontario Works also will take effect. Taken together, he estimated all these factors will result in a loss of about $70-million from the city's operating budget.

Mr. Del Grande, a member of the mayor's executive committee, said no one wants to raise taxes in an election year, but described the city's fiscal situation as "unsustainable."

"I think everybody is going to be in for a surprise," he said.

Mr. Ford has vowed to hold residential tax increases at 1.75 per cent for 2013 and flat-line them the following year. He also has said he would like to eliminate what he describes as a "terrible" land transfer tax.

Earlier this year, Mr. Del Grande mused that he would like to begin reducing the tax in 5 per cent increments over two decades, beginning in 2013.

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