Not practical to repeal land transfer tax, Toronto mayoral contenders say

Thestar.com
October 4, 2018
Tess Kalinowski

Mayor John Tory and his rival in the Oct. 22 civic election Jennifer Keesmaat went to the Toronto Real Estate Board on Wednesday to tout their awareness and solutions to the city’s housing affordability crisis.

But in back to back speeches, neither gave the 400 realtors in attendance what they really wanted to hear, which was a promise to repeal the Toronto’s land transfer tax that adds about $15,000 onto an average Toronto home purchase.

Mayor John Tory and mayoral candidate Jennifer Keesmaat both referred Wednesday to the challenges posed by teeming development and rising housing costs in Toronto.

Last year, the tax contributed about $640 million to the city’s operating budget.

Realtors are especially opposed to the tax because they say it discourages consumers from moving. Tory, who vowed to keep property taxes at or below the rate of inflation, said he would love to talk about repealing the land transfer tax but it simply isn’t practical.

“We’re just not in a position at the moment when it comes to meeting the needs of the City of Toronto to build transit and to help with affordable housing, to help with child care and things like that -- to talk about a tax reduction,” he said.

“It would be irresponsible at this point, without another plan in place, to be proposing that we get rid of it. But it should be something we work towards,” said Keesmaat.

“We’ve been through an era of downloading services on the municipality and that has not been accompanied by the financial realignment by both the federal and provincial government of our tax dollars,” she said.

Even a small portion of those taxes to reinvest in the city that generates that revenue is essential to Toronto’s sustainability, said Keesmaat.

Both mayoral hopefuls referred to the challenges of Toronto’s teeming development and rising rents and house prices.

Tory stressed his record in building provincial and federal partnerships for attracting investments in transit and helping Toronto meet its affordable housing targets for the first time. This year, 1,586 units of affordable housing have been approved -- above the target of 1,000. The city is now working on 40,000 affordable units in the next 12 years.

“I don’t think you set goals that you can’t achieve,” he said.

Keesmaat, however, chided Tory’s lack of ambition, saying she would use the city’s surface parking lots and one-storey transit stations to build affordable housing. She said her plan includes building 100,000 homes for middle-class families.

The city is no longer affordable to the disappearing middle class, people who work as teachers and nurses, she said, and that threatens Toronto’s competitiveness.