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Toronto zeroes in on tax hikes as Kelly ‘optimistic’ about budget consensus today

Norm Kelly, deputy mayor of Toronto, takes in a powerpoint presentation during a budget committee meeting on Jan. 22, 2014.

FRED LUM/THE GLOBE AND MAIL

Toronto homeowners should expect taxes to rise between 2.23 and 2.75 per cent, say several city councillors involved in 11th-hour negotiations to find the 23 votes needed to pass a 2014 budget this week.

The final tax hike will be higher than the 1.75 per cent recommended by the city's executive committee, most councillors agree. Deputy Mayor Norm Kelly, who has taken a leadership role on the budget since council stripped Mayor Rob Ford of most of his powers in November, is recommending a 2.23-per-cent increase including a 0.5-per-cent levy to fund a Scarborough subway extension. He said late Tuesday he is "optimistic" that he has council's support ahead of the debate that begins Wednesday.

"The good ship budget is going to be sailing into port tomorrow," Mr. Kelly said.

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Moments after Mr. Kelly spoke, however, Councillor David Shiner stepped up to the same microphone, announcing he will push for a tax freeze, based on the savings he says the city will see because of unfilled vacancies. Mr. Shiner said that the budget accounts for hundreds of new staff for 2014 – many more than the city will likely actually hire.

"In my perspective, this should be a zero-increase budget, because we are charging taxpayers for services that we know – and staff have knowingly put forward – that we can't deliver at the levels they're taxing people for."

Adding to the uncertainty is the mayor himself, who is promising to bring more than $50-million in savings to council – cuts he refuses to reveal in advance. Mr. Ford, who spent Tuesday visiting apartment buildings, wants a 1.75-per-cent tax increase for homeowners that includes the subway levy, but has already predicted most of his motions will be defeated by councillors who "stabbed him in the back" by taking away his powers.

Councillor Doug Ford, who spoke to reporters at City Hall Tuesday for the first time in a week, shares the mayor's opposition to the budget passed by the executive committee, because it raises the forecast for land-transfer tax revenue. "It's like gambling with futures with the taxpayers' money," he said.

The mayor has not released details of his proposed savings, he said, because councillors would "tear them apart and decipher every single line."

Aside from the differences on tax rates, there is a chance Wednesday's meeting could become yet another debate on transit funding. Councillor Josh Matlow is planning a motion to defer the 0.5-per-cent levy to fund the Scarborough subway extension, saying this is not the year to hike taxes and increase debt to fund a project "we know very little about."

The budget debate will be a milestone for the city under its new makeshift two-mayor system, and will take place against the backdrop of the coming municipal election. Whatever the final outcome, the budget and the tax rate it imposes will be a major talking point in the municipal campaign.

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Councillor Shelley Carroll, budget chair under former mayor David Miller, spent much of Tuesday in talks with fellow councillors, an effort that she described as trying to "fix" the budget passed last week at executive. Several councillors and the deputy mayor say they want to reverse a motion introduced by Mr. Shiner at executive to raise the forecast for revenue from this year's land transfer tax to hold the residential-tax increase at 1.75 per cent, including the subway funding.

TTC Chair Karen Stintz, who is planning to run for mayor, said she'll be supporting Mr. Kelly's motion for a 2.23-per-cent residential tax increase, noting that she has been told it will include an additional $3-million for the TTC – money that was turned down by the executive committee last week. "He's got a proposal that I believe is coming forward that has the support of council and has my support," she said.

With reports from Oliver Moore

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National Food Reporter

Ann Hui is the national food reporter at The Globe and Mail. Previously, she worked as a national reporter and homepage editor for theglobeandmail.com and an online editor in News. More

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