For Immediate Release:
Councillors question $50 million tax
giveaway at City Hall
January 30, 2009 –
Mayor David Miller will recommend approval of a $50+
million tax giveaway at this Monday’s Executive
Committee meeting, under the guise of implementing a
freeze on residential development charges. The move
would result in the City forgoing $50-70 million in
annual revenue it is entitled to collect beginning May
1st, at a time when municipal budgets are increasingly
strained and infrastructure is failing.
The Mayor’s rationale? Development industry jobs are at
risk. The slowdown in the economy is being reflected in
fewer housing starts and the development industry claims
that projects are becoming unprofitable – hence they
will abandon projects and jobs will be lost
unless they are bailed out with $50 - $70
million in relief from development charges.
However, critics like Councillor Cliff Jenkins (Ward 25,
Don Valley West) point out that the development industry
builds housing to meet demand. “Providing the industry
with a $50-70 million handout will not create one
additional unit of demand,” said Jenkins. “For the most
part, it will pad the profits of a very profitable
industry.”
Instead, Jenkins argues, the money should be used for
its intended purpose: building municipal
infrastructure. “That
will provide jobs
-
probably many more than the development industry would
provide. Note that the industry is making no guarantees
in return for the $50 - $70 million. Their only
guarantee is to accept the money.”
Other Councillors are similarly critical of the Mayor’s
plan. “We already have a major capital infrastructure
deficit in this city and it’s only going to get worse,”
said Councillor Michael Walker (Ward 22, St. Paul’s).
“This is money that our own CFO has identified as
critical to our ability to finance new municipal
infrastructure – infrastructure that is necessary to
support anticipated population growth in the coming
years.”
“Ultimately, the brunt of the $50-70 million will be
borne by Toronto’s residential property taxpayers –
homeowners and tenants - the same demographic that
Miller has targeted with a multitude of new taxes and
user fees over the past couple of years,” said
Councillor Karen Stintz (Ward 16, Eglinton-Lawrence).
“Here again, we see the Mayor supporting special
interests at the expense of ordinary citizens.”
The giveaway amounts to about $20 - 25 per Torontonian
per year. But as Councillor Jenkins points out,
Toronto’s policy of low development charges (DC’s) over
an extended period of time has actually cost us much,
much more.
“It's
caused us to silently finance most of our municipal
infrastructure growth through debt - typically
$200 million or more per year,” explains Jenkins. “Debt
service charges are now the second largest line item in
the City's Operating Budget. In response to my
questions in Council, our CFO acknowledged that every
residential taxpayer now pays about 10% of his/her
municipal property taxes in this way, as a subsidy to
the development industry. It has to stop.”
In a recent Federation of Canadian Municipalities press
release, Mayor Miller trumpeted the new jobs that
Toronto is creating by investing in infrastructure
projects. And he said ‘additional projects are ready to
go now but we need funding right away.’ “I find it more
than a bit hypocritical that the Mayor would make that
statement while simultaneously walking away from $50-70
million in development charge revenue and the new jobs
it would create,” said Councillor Walker.
No other government has indicated any
intent to bailout the development industry.
In fact, with rates that are already 2-3
times higher than Toronto’s, municipalities in the 905
are demanding that the provincial government permit
higher DCs by amending the Development Charge Act to end
its very restrictive and developer-friendly provisions.
Alone among municipal leaders, Mayor Miller is proposing
exactly the opposite - a massive giveaway to the
development industry.
David Bawden of the York Mills Ratepayers Association
sums it up nicely: “To buy the Mayor’s argument, you
have to believe that the development industry is in
worse financial shape than the City. That’s a tough
sell to property taxpayers – we’re the ones paying the
bills.”
-30-
Media Contacts:
Cliff Jenkins,
Councillor, Ward 25, Don Valley West – 416-395-6408
Michael Walker,
Councillor, Ward 22, St. Pauls – 416-392-7906
Karen Stintz,
Councillor, Ward 16, Eglinton-Lawrence – 416-392-4090
David Bawden,
President, York Mills Ratepayers Association
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