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New Land Transfer Tax

I'm glad Hume is finally looking west of Etobicoke Creek. This is what has always baffled and infuriated me about Toronto. Every single municipality in the province is dealing with having to pay for provincially-mandated social services. It's wrong and everybody knows it. There's no reason why Mayor Miller couldn't lead a province-wide campaign for social service uploading, but instead Toronto has once again decided to go it alone, raging against the rest of the province "stealing" our money. I can tell you that it goes over horribly in the rest of the province, where like it or not the majority of the population lives, and there's just no reason for it. This isn't about Toronto, it's about municipalities across the province being saddled with unreasonable costs.
 
It's an asset, not a lifestyle. And the value of the asset can't be realized until the house is sold.

If someone gives me an expensive house, an expensive car, and a bunch of expensive gadgets my lifestyle has changed even if I don't actually have any money. Material things define a lifestyle just as much as cash in hand. If I am living in a trailer park and using a bike to get around it doesn't matter how much I have in the bank... I am living a trailer park lifestyle.

These things can be quite location specific as well. Otherwise every two bedroom house in the province would be priced exactly the same (and taxed the same).

But the reality is that costs are different in different municipalities so even if every property the same size was the same price the taxes would still be different. If the average citizen in Toronto pays more taxes than someone outside of Toronto it is because Toronto is spending more money. But lets say that taxes were calculated not by price but by square feet of land... oops, that hurts the long time home owners because condos use hardly any land. OK, lets say that taxes were calculated based on square feet of livable space... oops, that hurts the long time home owners again because new condos and homes built are smaller than the old single detached homes in the city. What formula do you think is fair to use?

Did you see me say that? No. So why raise a silly straw man like that?

I'm trying to figure out what math you would use to determine property tax. If some historic value from long long ago is to be used even though prices for everything that is covered by taxes have gone way up since then, then obviously things don't balance out. You stated that a higher property value in the 416 justified lower tax rates than the 905 without any explanation of your logic. That statement alone would show that somehow you believe that property tax rates should decrease with increasing property values.

As for comparin cars and houses - not the same no matter how you try to argue it.

Both are assets. One is expected to depreciate unless it is a classic, one is expected to appreciate or hold its value unless the area is undesirable, has a depressed economy, or something of that nature. But both are assets though and any balance sheet appropriately telling you someones net worth would consider the asset value.

Actually, I grow weary with your nit-picking on this singular topic. You clearly will believe what you want to believe: that hiking taxes is the best thing.

I have never said that. I believe that IF taxes need to be raised that it should not only hit a small segment of the population because it is the entire populaces responsibility to pay.

But I don't see you worrying whether that tax money will be well-spent, or you being too concerned on what it will be spent on. Those should be real issues to people who pay taxes - even if they are big fans of more taxes.

If you read my statements above in response to someone to 3cp1 I do believe that is important. I have a hard time believing anyone could be a big fan of taxes that are poorly spent.

The actual situation is this: raising all sorts of taxes does not fix the problems of downloading in this or any other Ontario city. Covering provincial responsibilities has consumed a far greater proportion of municipal taxes than it really should (something admitted as far back as the Harris government!). Municipal taxes are not designed to pay for provincial programs. That is why the province largely uses income taxes to finance these efforts; it is far more robust method of taxation (and more fair). The fact that the province has addressed this short-coming with yearly grants suggests that they recognize the problem of downloading, but that they refuse to do anything substantial about it solving it. Keeping their own tax situation in check is advantageous to being re-elected. If you can't fix that problem, then make it go away. That's what they did to the cities.

I agree. A reality that the city needs to live with until they can get things changed.

So Toronto now has taxing powers, and it intends to use them to continue to cover a significant portion of what ought to be provincial programs - in essence helping the povince to hide their negligence in terms of discharging their own responsibilities.

Of all the things they could tax they choose to tax property... something they already tax. They call it "land transfer tax" but it doesn't change the fact it is a tax on property. Its a tax calculated the exact same way as property tax (asset value at time of purchase) but taken as a lump sum at sale. I object to hitting new property owners with a tax which is not a sin tax (i.e. they are not wanting people to stop buying property) and which is meant to cover services for people not subject to the tax.

In the meantime, the city has fallen behind, either by lack of funds or through political short-sightedness to maintain its own purely municipal responsibilities. This makes for a compounding situation. The city asked for taxing powers and the province gave it. Now the province (the Premier) is demanding that they be used - so he won't have to raise taxes.

They city already has taxing powers on property so my point is this "land transfer tax" is ridiculous. I have nothing against liquor tax, vehicle registration tax, etc... those are actually new, perhaps punitive or consumption based and are actually taxing something that wasn't taxed before.
 
I'm glad Hume is finally looking west of Etobicoke Creek. This is what has always baffled and infuriated me about Toronto. Every single municipality in the province is dealing with having to pay for provincially-mandated social services. It's wrong and everybody knows it. There's no reason why Mayor Miller couldn't lead a province-wide campaign for social service uploading, but instead Toronto has once again decided to go it alone, raging against the rest of the province "stealing" our money. I can tell you that it goes over horribly in the rest of the province, where like it or not the majority of the population lives, and there's just no reason for it. This isn't about Toronto, it's about municipalities across the province being saddled with unreasonable costs.

I agree with you to an extent, but it is also clear Toronto is by far the most exploited and has the most legitimate gripe. As said in the article when municipalities with a population of 6200 (where a 1% increase in property tax would yield $18 000) need fundings of 2-3 million dollars to fix a water tower, costs are obviously outweighing taxes. I do agree that taxing distribution is not working for the whole province, and that it should be a hot issue.
 
I believe that IF taxes need to be raised that it should not only hit a small segment of the population because it is the entire populaces responsibility to pay.

Gee Enviro, you really have a hard-on for me concerning this tax issue. The trouble is, you should take it up with your City councillor, provincial MPP or federal MP. I don't write the tax laws, I just respond by paying them.

The trouble with the above quote is that the land transfer tax on property transactions only hits a segment of the population - those who happen to sell a property and live in Toronto. So the little provision about how an entire populace has a responsibility to pay goes out the window. Add to that, the good property owners of Toronto get to pay a new tax to cover, in part, downloaded costs courtesy of the provincial government - and the provincial government still collects for those services, too!

I'm trying to figure out what math you would use to determine property tax. If some historic value from long long ago is to be used even though prices for everything that is covered by taxes have gone way up since then

You say it, but you can't prove it, can you? What is "way up?" A thousand percent? Should city living be a preserve for the ultra-wealthy?

Of all the things they could tax they choose to tax property... something they already tax. They call it "land transfer tax" but it doesn't change the fact it is a tax on property. Its a tax calculated the exact same way as property tax (asset value at time of purchase) but taken as a lump sum at sale.

It would be a defined tax much like the provincial land transfer tax.

I agree. A reality that the city needs to live with until they can get things changed.

I presume you mean that the city should go ahead and raise taxes anyway. That would be the worst thing to do. First off, cutting taxes takes forever. And second, if Toronto manages to balance its books while carrying provincial responsibilities, there would be zero motivation for the province to do anything to reduce that burden. The city should make cuts to the programs that are the responsibility of the province.
 
Gee Enviro, you really have a hard-on for me concerning this tax issue. The trouble is, you should take it up with your City councillor, provincial MPP or federal MP. I don't write the tax laws, I just respond by paying them.

If you are arguing that land transfer tax is a good replacement for property tax then I am arguing with you. I have also written to my city councillor. I see no point getting an MP or MPP involved since they aren't planning on replacing a property tax increase with a land transfer tax.

The trouble with the above quote is that the land transfer tax on property transactions only hits a segment of the population - those who happen to sell a property and live in Toronto. So the little provision about how an entire populace has a responsibility to pay goes out the window. Add to that, the good property owners of Toronto get to pay a new tax to cover, in part, downloaded costs courtesy of the provincial government - and the provincial government still collects for those services, too!

Huh? This is what I have been arguing... now you are stating the same as a reason my reasoning doesn't make sense?

You say it, but you can't prove it, can you? What is "way up?" A thousand percent? Should city living be a preserve for the ultra-wealthy?

Are you kidding? Of course I can prove the city is spending more now than it did 50 years ago. City staff doesn't get the same salary as they did in the 50's. A TTC fare in 1954 was 15 cents it is now $2.75, am 1800% increase and the fare now still doesn't recover the entire cost of running the TTC. The biggest expense of the city is staff and the average Toronto staff salary in 2005 was $60k... I'm pretty sure in 1950 it would have been around $6k but I would need to do research to prove it (I found secretarial average salaries had increased from $3k to $30k US in North America) so a factor of 10 (or a 1000% increase) seems reasonable. It has nothing to do with Toronto being reserved for the ultra-weathy (housing prices set that). Costs for all levels of government would have probably increased by 1000% to provide the same level of service. We already know that the mega-city merger did not result in much savings so that shows that the city doesn't realize much cost efficiency on a per citizen basis by increasing the number of people served by its departments.

It would be a defined tax much like the provincial land transfer tax.

Are you saying it is flat rate... a tax that would be the same on a $200k property and a $1M property. That is worse than income tax and property tax as far as taking ability to pay into consideration.

I presume you mean that the city should go ahead and raise taxes anyway. That would be the worst thing to do.

Well yes. The options are a mix of efficiency increase (I'm not holding my breath on much improvements here), service cuts, and tax increases. The alternative for the city is bankruptcy which in my opinion would represent a complete failure of city hall.

First off, cutting taxes takes forever.

Not on property tax. The property tax rate is calculated annually and goes up and down like a yo-yo. It is the easiest tax to remove unlike changes to sales taxes, fees, etc.

And second, if Toronto manages to balance its books while carrying provincial responsibilities, there would be zero motivation for the province to do anything to reduce that burden. The city should make cuts to the programs that are the responsibility of the province.

Well cuts are one of the alternatives... an alternative being by-passed by a plan to implement a "land transfer tax" which is what I have been arguing against.
 
If you are arguing that land transfer tax is a good replacement for property tax then I am arguing with you.

I stated right from the get-go the land transfer tax is a bad idea, and calculating municipal taxes is something in need of repair.

Huh? This is what I have been arguing... now you are stating the same as a reason my reasoning doesn't make sense?

Go and read my posts. I have been arguing against these new taxes and new tax increases because the premise for them is wrong. The city does not need tons of new revenue, it needs a provincial government that acts responsibly and picks up its duties to cover its own programs from its own revenue streams.
 
I don't think Tory is going to be much help. He's taking the "blame Dalton" approach, while meeting with the usual gang - Stintz, Ootes, Minnan-Wong, etc. Now I hate Sorbara and his pork-barrel politics and patronizing stands, but McGuinty's better than Tory by default. Tory, for example, is looking to fund private religious schools as a wedge issue, but has been even more vague than McGuinty lately.

Globe and Mail:Tory urges council to seek audit before imposing new taxes
JEFF GRAY

August 2, 2007

Provincial Progressive Conservative Leader John Tory came out of a meeting organized by right-leaning city councillors yesterday to repeat his call for council to perform a "value for money" audit before imposing the new taxes proposed by Mayor David Miller.

"We've got to make sure we have the house in order," Mr. Tory told reporters outside his office, accusing Liberal Premier Dalton McGuinty, who granted Toronto the power to impose the new levies, of being too quick to look to taxpayers for more money.

Mr. Tory, who lost to Mr. Miller in the 2003 mayoral election, also repeated a pledge from his campaign platform to speed up a review of the offloading of social programs onto municipalities, which has been blamed for the financial problems facing Toronto and other Ontario cities.

Mr. Tory wants the report, which he said was being used as a stalling tactic, by year's end; it is currently due in February, 2008.

In an interview, Mr. Miller - who is on good terms with Mr. Tory and speaks with him often - said he disagreed with the leader's call for an audit. Mr. Miller argued that the city's finances have already been scrutinized, internally and externally, over and over again, and they are shown to have been very well managed.

"I think the hundreds of thousands of dollars that it would cost to do a value-for-money audit, given that we've already been audited, given that we have external benchmarks, given that we're already audited by three separate auditors, wouldn't be money well spent," Mr. Miller said.

Councillor Denzil Minnan-Wong (Ward 34, Don Valley East), a Conservative opponent of the left-leaning Mr. Miller, arranged the meeting with Mr. Tory and invited a group of like-minded city councillors to attend.

Mr. Minnan-Wong said he wanted to help push the city's case for more money from Queen's Park as an issue in the October provincial election.

(He added that he and colleague Karen Stintz have also requested meetings with Mr. McGuinty and NDP Leader Howard Hampton.)

Yesterday's chat in Mr. Tory's office came after threats from Mr. Miller of massive budget cuts - including the possible closing of the Sheppard subway - after Mr. Minnan-Wong and others on council voted to defer consideration of new taxes on home sales and vehicle registrations until after the Oct. 10 provincial election.

The mayor had argued the two new levies, which would bring in about $350-million a year, are necessary to shore up the city's finances.
 
I like Eye's stance on this issue. As I've been saying, we are still living under Harris...

card3_city_top.jpg


HARRIS HAUNTS US STILL

With the provincial election campaign unofficially underway, the news in Toronto remains, relentlessly, about the municipal government's cash crunch. City Hall politicos, while arguing about whether or not to raise taxes to finance the $575 million shortfall it faces in meeting next year's commitments, all agree that the provincial government should be footing a bigger chunk of the bill.

Liberal Premier Dalton McGuinty, meanwhile, says that he won't be leading the cavalry, and that Toronto needs to make some “difficult decisions.†Conservative leader John Tory walks an even firmer line against helping Toronto, saying that not only will he not open the Queen's Park purse but that the city should be prevented from raising taxes on its own.

One might be forgiven in all of this for assuming that the agendas of Miller, McGuinty and Tory have any relationship to this discussion. In truth, all of them are carrying out the business of Mike Harris, the former premier, and implementing his Common Sense Revolution.

Harris and his revolutionaries implemented an ideological program, slashing both taxes and program spending while shifting responsibility for big-ticket items such as welfare and social housing onto the municipal tax base.

This, as intellectual John Ralston Saul pointed out at the time, is a tactic straight out of the neo-liberal textbook: if what you want is smaller government but you don't want to have an uncomfortable debate about, say, the merits of the welfare state, you shift responsibility for those things to the cities, claiming that they'll be better administered “closer to home.†You then immediately cut taxes so that any successor who would like to undo those changes will need to swallow political hemlock by raising taxes to do so.

But, of course, funding those programs from the local tax base is near impossible. And so there is, once again, a fiscal “crisis,†requiring “difficult decisions.†Everyone would like to expand transit and policing and welfare, the argument then goes, but who has the money?

And so in this way, neo-liberal governments accomplish the task of gutting the welfare state without any real debate. Following the Xs and Os in this small-government playbook, Harris downloaded provincial programs onto cities while cutting income taxes by 30 per cent.

And look: five years after Harris left office – during, you'll note, one of the longest sustained economic booms in Canadian history, a period of tremendous prosperity – our cities are neck-deep in a fiscal crisis, faced with the punishing choice of hiking taxes or shuttering services. Toronto faces a “structural deficit†of $1 billion per year, according to the Conference Board of Canada. Surprise! The Common Sense Revolution is alive and well at Toronto City Hall, and our local politicians implement Harris' plan every time they privatize a street furniture program or threaten to close a transit line.

No one talks about this in these terms, of course, lest they be accused of fighting yesterday's battles. But this should be a live issue in the provincial election campaign. Dalton McGuinty came into office selling himself as the antidote to Harris' revolution, not as the guardian of its legacy. He ought to be shamed into undoing the damage of Harris' years by accepting responsibility for those abandoned programs and, if necessary, inching income taxes back up to pay for them.

John Tory ought also to look at undoing Harris' damage. It was the legacy of Bill Davis-style Red Toryism (the kind Tory claims to be so fond of) that Harris shredded. Progressive Conservatives of Tory's ilk governed Ontario for 42 consecutive years between 1943 and 1985 and built the great society that Harris spent seven years gutting. He should feel no obligation to carry on Harris' thrashing of the stable Ontario his predecessors built.

The city government, doing the best it can in a crisis of Mike Harris' making, hopes to make this a provincial election issue. The alternative is to continue doing Mike Harris' bidding for a generation to come.
 
I agree with eye.

I'm just so frustrated with Toronto city council. Both the left- and the right-leaning councillors have behaved abysmally in this (perhaps somewhat artificial) budgetary crisis. The Miller allies seem to be digging around the whole city to find the most painful and visible cuts possible in order to make their ideological point that there's no fat to cut. The right wingers, on the other hand, make it sound like cutting the Mayor's office and privatizing garbage would solve all the city's problems. Both approaches are equally absurd. Clearly there are middle management positions and redundant staff (Scarborough RT drivers, anyone?) which should be cut long before things like litter pickup and bus routes.
 
I completely agree. There's certainly something very wrong with Miller's approach. There was no big public warning about the budget, and all of a sudden, after the deferral vote, the cuts start with Miller saying "I told you so" when it was certainly less than that. Transit was the first thing out the window, when Miller/Giambrone were supposed to be finally making progress on it.

Miller allowed the real estate brokers and agents to march through City Hall warning of doom-and gloom because they might make a slightly lower commission in a white-hot real estate market. He let the right-wing and the Sun take over the agenda, when he should have had a majority on this issue.

As I am a left-of-centre voter and would consider myself at least mildly supportive of Miller, it has left me very disappointed. Miller screwed up big time, and he still can not learn to pull back a bit, or learn not to get his way every time. Even Lastman (who was a far worse mayor for Toronto than Miller) learned to work with the likes of Jack Layton.
 
One might be forgiven in all of this for assuming that the agendas of Miller, McGuinty and Tory have any relationship to this discussion. In truth, all of them are carrying out the business of Mike Harris, the former premier, and implementing his Common Sense Revolution.

Harris and his revolutionaries implemented an ideological program, slashing both taxes and program spending while shifting responsibility for big-ticket items such as welfare and social housing onto the municipal tax base.

This, as intellectual John Ralston Saul pointed out at the time, is a tactic straight out of the neo-liberal textbook: if what you want is smaller government but you don't want to have an uncomfortable debate about, say, the merits of the welfare state, you shift responsibility for those things to the cities, claiming that they'll be better administered “closer to home.” You then immediately cut taxes so that any successor who would like to undo those changes will need to swallow political hemlock by raising taxes to do so.

But, of course, funding those programs from the local tax base is near impossible. And so there is, once again, a fiscal “crisis,” requiring “difficult decisions.” Everyone would like to expand transit and policing and welfare, the argument then goes, but who has the money?

And so in this way, neo-liberal governments accomplish the task of gutting the welfare state without any real debate. Following the Xs and Os in this small-government playbook, Harris downloaded provincial programs onto cities while cutting income taxes by 30 per cent.

And look: five years after Harris left office – during, you'll note, one of the longest sustained economic booms in Canadian history, a period of tremendous prosperity – our cities are neck-deep in a fiscal crisis, faced with the punishing choice of hiking taxes or shuttering services. Toronto faces a “structural deficit” of $1 billion per year, according to the Conference Board of Canada. Surprise! The Common Sense Revolution is alive and well at Toronto City Hall, and our local politicians implement Harris' plan every time they privatize a street furniture program or threaten to close a transit line.

I wish, I wish, I wish SO much that this was widely understood and internalized, as this is THE crux of all the issues involved. To all those still looking at City Hall as the culprit, re-read the underlined sections in particular and please finally understand how you have been manipulated and for what purpose, and to whose drum you're dancing. The neoliberals' plan is working out just peachy, simply because so many people STILL don't understand the masterplan that they are playing into. It's really all quite maddening, and totally predictable - as the Eye piece points out, these are now old-hat tactics, yet the bulk of us continue to just plain not get it. Please, all - finally GET IT, and understand the true source of the situation, and the real reasons for it. If you don't grasp this, then you will almost certainly fundamentally misunderstand everything that's going on at all 3 levels of gov't and why.
 
Minor quibble: There is no "masterplan."

There is no plan.

That's the problem.
 
Chief's pledge to cut police costs 'a start,' Miller says
JEFF GRAY

August 10, 2007

On the eve of the release of a much-anticipated list of up to $100-million in city budget reductions, Mayor David Miller yesterday once again tiptoed around the political minefield of asking the police to cut costs.

After a police services board meeting, he praised Police Chief Bill Blair for pledging to find $2-million to $3-million in administrative savings - well below the $10-million figure requested by city manager Shirley Hoy to help the city with its financial squeeze.

"It's a start," Mr. Miller said, adding that he hopes the board will come up with even more savings when it reports back on its reductions in October. "What we're trying to do is manage in a really difficult circumstance without compromising public safety."

Both the chief and the mayor said yesterday cuts that would affect the number of officers on the streets are unacceptable. And they both agreed that one runaway budget item - the cost of providing security to courthouses run by the province - needs to be reined in.

On a motion moved by Mr. Miller, the police services board voted unanimously to ask Chief Blair to come up with a plan that would "significantly" cut the costs of security in the courts, which are estimated at $47-million for next year, compared with just under $16-million in 1990. In 2006, the bill was just $38-million, but the province built seven new courtrooms.

The mayor's motion also directed the chief and police services board chairman Alok Mukherjee to meet with the province's Attorney-General and Chief Justice about the rising costs, which used to be partly covered by the province.

"This board won't have the money, so we'll face a choice of providing court security or officers on the street. If we're not careful, that's the choice this board will face next year," Mr. Miller told his fellow police board members.

Today at noon, the city manager is expected to announce budget cuts of up to $100-million that the mayor, his supporters on council and city officials say are needed to cushion the blow delivered by council's decision last month to defer discussion of his two proposed new taxes until after the fall provincial election.

Mr. Miller said the deferral of the taxes - a land-transfer levy of up to 2 per cent and a $60 motor vehicle registration fee - will cost the city about $80-million, assuming they are eventually passed in October and can be implemented in March, three months behind schedule. They were expected to bring in about $350-million annually.

The city is already facing a $575-million budget shortfall in 2008, which almost everyone on council blames on the province's refusal to "upload" the cost of social services foisted on to municipalities in the 1990s.

The cuts today are expected to be service reductions, not the cutting of entire programs, which would require city council approval. However, targets for even larger cuts, which could come if the tax revenues Mr. Miller says he needs are not flowing, may also be outlined.

Road maintenance, litter pickup and the upkeep of city parks are expected to take hits, as are any discretionary spending or new programs. Sources say a planned new public health program to offer free dental services to poor adults at a handful of clinics may be among the new expenditures cut, for example.

The head of the city's outdoor workers union, Brian Cochrane of Local 416 of the Canadian Union of Public Employees, warned that any move to lay off seasonal city workers would sour labour relations, dampen union support for Mr. Miller and result in an avalanche of formal grievances.
 
So how do the citizens of Toronto want to deal with this budget problem? Well, they don't want more taxes. They also don't want to cut services. Firing staff is apparently out of the question as well. But cutting out the free coffee for councillors seems like a great idea!
 

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