Toronto threatened with two new taxes
The country’s largest city, Toronto, has always been known as the economic capital of the country. Today this view is arguably incorrect. The city has been shedding jobs in the manufacturing sector for the past five years. The average unemployment rate for this period has been 8.1 percent. For the first time in history, the rate is higher than the national average of 7.2 percent. The city’s municipal government is also facing a structural deficit of upto $1.1 billion per year.
Mayor David Miller’s proposed solution has been the introduction of two new taxes - a 2 percent fee on property purchases, and a $60 surcharge on motor vehicle registration. The two new taxes will be considered in October.
I suggest the city look towards a more cheap and possibly more innovative solution. A land-transfer tax will most likely reinforce an already slowing housing market in the city. The city needs to shift its focus along with the rapidly changing Canadian and global economies. The city has displayed strong job growth in financial services, retail and wholesale trade, and professional services in counterbalance to manufacturing job losses.
The city should consider lower program spending, and establishing closer relations with the private sector. The root costs leading to the city’s problems should be lowered before introducing new taxes.
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