This email was forwarded to me by one of my clients who emailed his City Councillor objecting to the proposed Toronto Land Transfer Tax. This is Counillor Jenkins' response.
If you have a similar response, whether you were in favour of, or against the proposed taxes, please email them to me (vpirri@trebnet.com) and I'll be happy to post them here, also...
Dear Resident,
A very large number of Ward 25 residents corresponded with me on the new taxes just adopted by City Council, providing thoughtful comments on all related aspects. I've tried to keep up with providing personalized responses - but the volume of mail and email on this topic has become overwhelming. Consequently, I am sending this note to all Ward 25 correspondents who provided comments on both sides of the issue. If you have a question or thought for which you still wish to receive a personal reply, please let me know. Either I or one of my assistants will respond as quickly as we can.
The two new taxes were passed by Council on Monday, October 22. I voted AGAINST both.
Ward 25 residents who wrote in opposition to the taxes outnumbered those in favour by a margin of about 5 to 1. A great many expressed very strong feelings, to the point of outrage, about double taxation on an unfairly targeted segment of Toronto, as well as various economic impacts. Those who wrote in favour expressed great concern about the potential loss of municipal services if the new taxes were not passed.
The new Land Transfer Tax will come into effect on February 1, 2008 but will not apply to any agreement signed prior to December 31, 2007. First time buyers will receive a credit up to the amount payable on a $400,000 purchase price. Revenues from the two new taxes in the first year will be under $200 million. Subsequent revenues are expected to be about $300 million per year (down from the originally projected $356 million per year). There is still no good estimate of administrative and other costs of the new taxes.
Quite surprisingly, the Mayor moved that revenue from the two new taxes will be directed "exclusively to capital and operating costs of new municipal infrastructure." This is significant for two reasons - first, it belies his previously expressed rationale for the new taxes and provides absolutely no comfort to those who are concerned about the loss of current municipal services. Secondly, it could institutionalize the unfair relief that the development industry currently receives in funding new municipal infrastructure through ridiculously low development charges (DCs). (As previously reported, the City receives about $4,000 in DCs for each new resident of the City resulting from new development, but later spends about $23,000 in providing municipal infrastructure for each new person).
My amending motion to remove "capital and" from the Mayor's motion was defeated. I am very concerned that Council's adoption of his motion will now provide the Mayor with an excuse for his continuing lukewarm support for higher development charges. I will not be surprised if
1. he will continue not to press the provincial government for changes in the Development Charges Act to permit fair levels of development charges and
2. he will recommend only minor increases (e.g. 50% - 100%) when Council considers a new DC by-law in 2008.
Without such change, the taxpayers of Toronto will continue to subsidize a very, very profitable industry.
Not surprisingly, the development industry endorsed the Mayor's revised Land Transfer Tax and Vehicle Registration tax proposals. Why the Mayor would even seek their endorsement caused some Councillors to comment at Council. In my view, municipal government should operate for the benefit of its citizens, not special interest groups.
Lastly, it appears that the Mayor is confident of obtaining a deal with the provincial government on uploading costs of social services. I remain very concerned that the new taxes just approved by Council will also result in the failure to upload all of the costs of provincial programs (as previously reported, the province forces the City to deliver services costing $2.6 billion annually but provides us with only $1.9 billion - resulting in downloaded costs of $700 million). I will continue to report on this matter in my monthly Council Highlights newsletter which I invite you to subscribe to, if you are not already on my list.
Thank you again for your continuing input - on all sides. If there is a matter for which you wish to receive a personal response, please email me once again.
Thanks and best wishes.....Cliff Jenkins