Rob Ford is sticking to his promise to slash taxes next year, even though not doing so could help offset provincial cuts set to hit Toronto’s poorer residents.Last week Queen’s Park announced it is phasing out a $150-million grant that the city has been using to pay for social housing. The funding will be completely eliminated by 2016 but will be reduced by about $50 million next year, putting substantial pressure on Toronto’s already underfunded housing programs.
Despite that looming financial blow, at a press conference Thursday Mayor Ford vowed he would push ahead with his plan to reduce the land transfer tax by 10 per cent, which would deprive the city of $34.5 million in annual revenue.
During the 2010 election campaign, Ford promised to get rid of the tax altogether. But it represents roughly 10 per cent of the entire net operating budget and the mayor has since conceded that scrapping it is unrealistic.
“Obviously that’s not going to happen,” Ford said Thursday. “So I said I’m gonna do 10 per cent… and 10 per cent is achievable. And that’s what the people elected me to do, is keep taxes low and reduce the size and cost of government.”
The mayor slammed the provincial government for pulling the $150-million in funding, a move that he said came as a “complete shock.” The money represents about one quarter of the Shelter Support and Housing Administration’s spending on social housing, he said.
“A 25 per cent cut to the Shelter Support and Housing budget would have a devastating, devastating impact on Toronto’s most vulnerable residents,” said the mayor.
“By removing this crucial funding, the province is leaving Toronto behind and hurting the residents of the city.”
Ford has directed city manager Joe Pennachetti to draft a report on the impact of the province’s decision. It will be tabled at city council’s meeting in July.
But while Ford claimed the province was forcing the city to slash social housing programs, Pennachetti confirmed that it would be up to council as part of the 2014 budget process to decide which department takes the hit.
“At this stage it’s a funding source that’s applicable to the housing program,” he said. “Does council have a choice to look at other programs? Of course.”
Councillor Frank Di Giorgio stood next to Ford at the City Hall press conference Thursday and offered a somewhat muddled defence of his boss’s pledge to reduce the land transfer tax.
“The land transfer tax may go up by 10 per cent, how do I know?” he said at first. Di Giorgio, who was appointed budget chief in February, argued that he would have to go through the lengthy annual budget process to see if the tax could be lowered.
Under further questions from reporters however he said, “I would say, if the funds are available, I will support” Ford’s 10-per-cent goal. Asked if the provincial funding cut means the city can’t afford to lower the tax, Di Giorgio responded, “I might have some pool of funds somewhere that are hiding somewhere, I don’t know.”
Councillor Adam Vaughan, an outspoken critic of the mayor, called Di Giorgio’s remarks “the most bizarre explanation of our situation I think I’ve ever heard from a budget chief.”
Vaughan blasted both Queen’s Park and Ottawa for abdicating their responsibility on the housing file, but said the city has the taxation powers to make up for the lost funds.
“We have a surplus. We have revenue capacity in this city, and it’s time for us to stand up as an order of government and provide the services that Torontonians need, with the tools that have been given to us, and stop playing games with the province,” he said.
“To cut the land transfer tax now and put people in harm’s way is irresponsible, it’s bad government, it’s why Rob Ford is not going to be re-elected as mayor.”
After Ford’s press conference, Finance Minister Charles Sousa released a statement through his spokesperson claiming that the province has invested $1 billion in Toronto social housing programs since 2003. The statement suggested the mayor could keep the land transfer tax or revive the car tax council axed in 2010.
“As we’ve said all along, the City has choices,” the spokesperson’s statement said. “Cutting funding for social housing is a choice the Mayor is making, just as he has chosen not to benefit from land transfer or vehicle registration powers that he holds under the City of Toronto Act.”
Sousa also claims that the province is boosting the city’s finances by cancelling a $230 million Queen’s Park is owed from a loan given to Toronto to help with costs associated with amalgamation. The city manager said Thursday the loan had effectively already been cancelled, and no payments had been made in eight years.
Original Article
Source: NOW
Author: Ben Spurr
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