On May 27th, Ontario’s transportation agency, Metrolinx, released its final report recommending a number new revenue tools in the hopes of raising $2 billion annually for public transit in the Greater Toronto and Hamilton area (GTHA). Follow the link for more details on the report.
Fortunately for the real estate industry and Ontario home owners, the list of new taxes did not include a municipal land transfer tax (MLTT). The LTT was considered during the agency’s consultations process. Currently, the City of Toronto is the only municipality in Ontario that has the authority to levy a MLTT in addition to the provincial LTT. A recent study by the C.D. Howe Institute, found that the implementation of the MLTT in Toronto decreased home sales in the city by 16 percent. The study also found that homebuyers were more likely to move outside of the city to avoid the tax.
OREA has been a strong voice against the spread of the MLTT to the rest of Ontario. In order to draw attention to the importance of the issue, OREA made it a focus of the 2013 budget consultation process, which included a formal written submission, presentation in front of the Standing Committee on Finance and Economic Affairs as well as meetings with dozens of provincial MPPs and Ministers, including the Minister of Finance.
While the municipal LTT seems to be off the table at the moment, OREA is continuing its active work on the file in order to prevent Ontario municipalities from receiving the ability to levy the second LTT.
In its report, Metrolinx recommended four revenue tools expected to help the province raise $2 billion per year. These new charges include: a 1-percentage-point increase in the harmonized sales tax (HST), a 5-cent increase in the gas tax, a non-residential parking levy averaging 25 cents a space per day and a 15-per-cent increase in development charges.
Three additional tools, such as high occupancy toll lanes, paid parking at transit stations and land capture taxes are also being recommended.
Metrolinx says all the revenues would be dedicated to public transit, with 25 per cent belonging to municipalities to fund local transit and transportation projects. The Metrolinx report is being reviewed by the provincial government who has committed to holding more consultations in the coming months.