🔭 PLATFORM VIEW: Brad Bradford’s “Toronto Can’t Afford Olivia Chow’s 20% Property Tax Hike” Position
🔗 LINK: votebradford.ca/oliviachowspropertytaxh…
🔧 DOABLE? No.
💰 COSTED? Not in any realistic way.
✨ OVERALL: ⚫️ (Zero out of five)
This is a bit outside the normal bounds of this Platform View feature, but I wanted to take a quick crack at this Brad Bradford policy drop because it is fully ridiculous.
Bradford is claiming Olivia Chow will raise property taxes by 20%. He stated as much several times in yesterday’s mayoral debates and will probably level the same accusation tonight.
His campaign, to his credit, has provided a backgrounder explaining their math.
But the math, to its discredit, is very very silly.
Let’s do a quick point-by-point of how Bradford is claiming Chow will raise property taxes by 20%.
1.83% more - Chow’s commitment to increase the City Building Fund by an additional 0.33%, over and above the 1.5% increase that will be hitting property tax bills in 2023.
Not a completely egregious way to start — don’t worry, the silliness comes later — but that 1.5% increase is already a generally assumed reality. The City Building Fund was extended through 2035 as part of the 2023 budget process. Bradford voted for it.
Unless he’s saying he’s now reversing his position and will cancel the Fund increases, only the 0.33% increase is relevant here — it’s the only bit of difference in Chow’s plans versus the status quo.
2.0% more - Chow’s commitment to spend $100 million each year to have the city buy apartment buildings and transfer them to new operators, plus $12 million for other housing-related programs. Chow claims that the money for this will come from the City’s capital budget – despite Toronto having a $29.5 billion unfunded liability for existing, planned and badly-needed infrastructure upgrades and repair – as well as increasing the Vacant Homes Tax by two percentage points - from 1% to 3%.
Toronto does have a big unfunded capital liability but that doesn’t mean that all capital spending must now be considered operating spending. Buying apartment buildings would be capital spending because it’s… capital spending. Chow’s biggest obstacle here will be Council’s debt limit, but since that limit is a function of property tax revenue, some increases to property taxes above inflation will create more room.
Bradford claims Chow is banking too much on the vacant home tax, and while it’s true the number of vacancies came in much lower than staff estimates, increasing the tax to 3% (from 1%) would likely still yield additional revenue — I’d estimate the total amount raised from a 3% VHT would be about $44 million, though that figure could decline as more owners are motivated to rent out their properties.
1.2% more - Chow committed to build a dedicated Scarborough Bus Rapid Transit corridor, with or without provincial or federal funding support, at a lowball cost of $60 million.
Experience, both at home and around the world, has demonstrated that major transit projects such as this invariably experience significant cost overruns when compared to rosy initial forecasts.
Using a comparable example from the region, Mississauga’s Transitway BRT was delayed by nearly 4 years and was 30% over budget by the time it opened in 2017. Using the same estimated cost increase applied to Chow’s estimated project cost generates a new cost of at least $78 million. Experience has taught that the real impact will likely be even higher in Toronto, in part due to Chow’s commitment to maintaining costly closed, non-competitive tendering for city-funded infrastructure projects, despite costing taxpayers upwards of 20% more per project.
Again, I start with this: is Bradford saying he won’t build the busway unless someone else agrees to pay for it? Because that seems like a position that could leave a lot of Scarborough transit riders out in the cold.
Either way, paying for the entire construction cost of the Scarborough busway all at once with a property tax increase is not at all how this works. This is not how any of this works.
For a capital project like this, maybe you issue a small tax levy over a few years and then use that money to service debt costs. That’s how the city’s Scarborough Subway levy worked.
3.7% more - Chow has committed to restoring TTC service levels to 2022 standards, unsupported by ridership levels. Other candidates that have shared this commitment have concluded that the annual cost to do this is $180 million.
This is probably the most valid point, though Steve Munro has estimated the cost to restore TTC service is probably more like $141 million.
Worth it? Well, history has generally shown that it’s very hard to grow ridership without first providing good service.
5% more - Chow has made an even further commitment towards "significantly improving transit service". Considering that the City of Toronto contribution to the TTC operating budget in 2023 is nearly $960 million, and just restoring service levels to last year’s level will cost $180 million (equivalent to a 3.7% property tax hike), any significant expansion to TTC service levels over and above that can be reasonably assumed to require at least another 5% from property tax payers. Again, this proposal is unsupported by ridership levels.
Now he’s just getting silly.
The assumption that a pledge to improve transit service — even “significantly” — automatically translates to a 5% property tax increase is entirely groundless.
This is just making up numbers.
0.25% more - Chow is projecting significant new revenues from increasing the Municipal Land Transfer Tax on homes sold for more than $3 million, estimating that this will immediately begin generating a generous $29 million a year. This is a very aspirational estimate, unsupported by the data, and based on the number of sales during the peak 2020-22 period amid a historically red hot housing market, not at the current levels of lower prices and sales volumes at or near all-time lows, especially for the expensive homes that Chow’s tax is depending on.
Banking on the land transfer tax— revenue that rises and falls with the real estate market — is always a bit risky. The good news for Chow is that even if the new “luxury brackets” of the LTT don’t deliver on estimates, the revenue amounts are small enough that they can be captured with just a small property tax increase.
6% more - For the additional promises Olivia Chow is going to make between now and June 26.
Oh come on.
This reads like Bradford started this exercise with the 20% figure in mind but didn’t get there. So to cover the remaining gap, the team just threw in a provision for future campaign promises. Is the Bradford campaign psychic? Do they have a leaked advance copy of the Chow platform? Because if not, this is another number just picked from the air, based on nothing.
So to recap, of this 20% tax rate accusation:
11% is based on groundless assumptions
3.2% is based on capital spending that would not be funded all at once by the operating budget
1.5% is based on an already-existing tax levy plan supported by Brad Bradford and others
That leaves us with 4.3% — a figure that assumes a bigger cost to restoring TTC service than some estimates, zero additional revenue from the luxury land transfer tax, a 0.33% increase to the City Building Levy, and a tiny bit of rounding.
If Bradford wants to go into debates and accuse Chow of plotting a 4% increase on top of inflation — almost all of it going to better TTC service — he’d be on way more solid ground. But there’d still be the question of how he’d fund his own plans.
It would be nice if he’d spend less time criticizing the spending and revenue plans of other candidates, and show us his own.
PLATFORM VIEW is a daily(ish) feature by City Hall Watcher on Substack Notes. Got a request for a candidate policy proposal I should review? Let me know.