Photo by Enzo Di Matteo.
In an apparent shift to the left, mayoral candidate Olivia Chow is pledging to raise taxes on the sale of expensive homes in order to fund priorities like transit and school nutrition programs.
Chow laid out the new plank of her platform at her campaign headquarters on Tuesday, the day after Labour Day, which is traditionally seen as the start of the final leg of the municipal race.
Standing at a podium in front of baskets of healthy food and a map of her transit plan, she promised to create a new bracket of the land transfer tax (LTT) that would apply to homes and condos sold for $2 million or more. She said that by increasing the tax rate on the sale of these homes by one percentage point, the city could raise $20 million annually. Currently the highest LTT bracket starts at $440,000 and the sale of homes that fall under it are taxed at two per cent. According to Chow's campaign, the average home in Toronto sells for $585,000.
Chow said the extra money her tax hike would raise could be used to expand child nutrition programs to an additional 36,000 kids, buy and repair TTC buses to increase fleet capacity by 10 per cent, and fund engineering studies for the downtown relief line.
The candidate framed the tax increase on pricey property deals as a more equitable way to fund city services.
"Unlike income taxes, property taxes don't reflect someone's ability to pay. So we need to find ways to make city revenue sources more progressive," said her campaign in a press release. "One way we can do that is by changing the land transfer tax to better reflect an ability to pay-making it more progressive."
The promise to increase taxes marks a change in strategy for the former NDP MP, who has since she entered the race in March been at pains to defend herself from the accusation that she is a "tax-and-spend socialist." She has pledged to only increase property taxes around the rate of inflation and positioned herself as a politician who would "mind the public purse."
There are signs however that Chow's decision to run a more centrist campaign isn't working. Although she came into the race as the frontrunner, recent polling suggest declining support, with the most recent Forum poll placing her in third behind former Ontario Progressive Conservative leader John Tory and incumbent Mayor Rob Ford.
As part of his 2010 campaign, Ford promised to eliminate the land transfer tax entirely, but has been unable to even reduce it. Scrapping the tax would leave a huge hole in the city budget. In 2013, it brought in $356 million in revenue.