With Ontario’s Expenses Rising Faster than Expected, Government Raises Land Transfer Taxes

Ontario’s fall fiscal update shows expenses increasing faster than the government expected

The provinces’ fall fiscal update shows expenses increasing faster than the government expected, and faster than the Financial Accountability Office (FAO) expects. In the 2016 budget, the government planned to have expenses grow by 2 per cent – modest, but still above the Drummond Report recommendation of 1.4 per cent, and above the 2015 budget commitment to stay at 1 per cent growth. New numbers show that instead, expenses grew by 3.1 per cent in 2016. The government is planning on expenses growing next year by 2.4 per cent, and the FAO said that the government won’t even balance the budget even with a more modest 1.3 per cent expense growth. “With new schemes to buy off unhappy voters, this government is adding dramatically to their expenses,” said CTF Ontario Director, Christine Van Geyn. “The government’s expenses are almost double what the FAO assumed they would be when it projected Ontario will remain in deficit over the next five years. There is no plan to balance the budget that doesn’t involve more taxes.” \

It will cost Ontarians more to keep their families warm in the winter

The government is expecting revenues to increase dramatically in order to compensate for higher than budgeted expenses. One measure included in the fall fiscal update is an increase to the land transfer tax on commercial, industrial, multi-residential and agricultural properties under $400,000, as well as a land transfer tax increase for homes over $2 million. This increase will be partly used to fund a rebate for first time home buyers. “The government has already sold off huge assets like Hydro One to temporarily boost revenue. But with expenses growing faster than planned, it’s disappointing they’re looking to businesses and home buyers for more money,” continued Van Geyn. “While first time home buyers will benefit from a rebate, we remain concerned that this government continues to toy with the idea of doubling the land transfer tax in cities outside Toronto. We also remain concerned that other policies of this government will dramatically add to the cost of homes. For example, their requirement that all new homes with garages be built with electric vehicle charging stations,” continued Van Geyn. “The government says it cares about making home ownership affordable. But once people get into their homes, many are finding that they can’t afford to keep them. With hydro rates among the highest in North America, people can’t even keep their lights on, and with the new cap and trade tax on home heating fuels like natural gas, it will cost Ontarians more to keep their families warm in the winter,” concluded Van Geyn.