In order to fund major transit and housing projects, Toronto Mayor John Tory wants to substantially hike property taxes.
The Toronto Star says that Tory will pitch a plan for increasing a special levy (called the city building fund) on all property taxes.
The current planned levy increase is 2.5 per cent over five years. Under Tory's proposal, that would rise to a cumulative 1o.5 per cent over nine years.
Toronto city council has already approved a plan to hike the city building fund by 0.5 per cent every year until 2021, when it would max out at 2.5 per cent.
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According to The Star's Jennifer Pagliaro, Tory plans to put forward a motion at a December council meeting that would result in an additional 1 per cent increase in 2020, an additional 1 per cent increase in 2021 and an ongoing 1.5 per cent increase through 2025 for a cumulative 10.5 per cent tax once fully implemented.
Tory's plan would add 8 per cent over the original council-approved plan, said the Star.
A 1.5 per cent increase would apparently cost the average homeowner an additional $43 a year (less than 12 cents per day). What impact this would have on the housing market is unclear.
The Star reports that the fee on home and business owners, under Tory’s plan, would permit the city to support $6.6 billion in recoverable debt. The city would then be able to start borrowing immediately to put towards transit and housing needs.
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According to The Star, a review of the city’s services by the private firm Ernst and Young has found “millions” of dollars in possible efficiencies, but those efficiencies, even if put in place, are not enough to enable the city to deal with its housing and transit issues.
Toronto has gone through almost a decade of austerity measures. One of these measures included tax freezes which has meant that the city has effectively spent less and less per person and services have suffered.
Tory has championed and campaigned on keeping property taxes at or below the rate of inflation.
