Will Rob Ford be forced to break his promise to cut the city’s land transfer tax?
One of the mayor’s most ballyhooed campaign promises on the election trail last year was his proposal to cut the vehicle registration and land transfer taxes. The car tax proved a relatively easily revenue hole to fill—only about $65 million of the city’s budget—but it turns out that finding the funds to replace the $274 million the LTT pumped into municipal coffers last year is a much bigger problem. With the looming budget shortfall, Rob Ford is now stuck between a rock and a hard place: either break his promise to scrap the tax or sacrifice a nice chunk of change that could be used to address the $774-million gap between spending and revenue currently plaguing city hall.
Last Oct. 21, four days before the civic election, Ford warned he might not deliver on that promise until 2012.
Ten months later, Ford’s budget chief, Councillor Mike Del Grande, is advising the mayor that, with Toronto facing a budget shortfall of up to $774 million, the tax on real estate purchases should stay in place for 2012…
“We have been told by the mayor’s office they are looking at phasing the tax out over a two- to three-year time frame,” said Von Palmer, spokesman for the Toronto Real Estate Board, which has lobbied aggressively for the repeal of a levy he says unfairly penalizes Toronto homebuyers.
Given the knock-down fight the mayor is going to continue to have just to balance the budget this term, it’s difficult to imagine how he’ll be able to balance the budget in future years without facing even more heated opposition than he already has. But Ford has shown he’s capable of sticking to campaign promises despite good reasons to do otherwise (see: Sheppard subway, extension of), so it’s entirely possible he’ll try to put this one through anyway—which means that Toronto’s budget chaos isn’t likely to be a one-time only phenomenon.