Confusion at Queen's Park over Toronto's budget woes

Last Updated: Thursday, April 5, 2001 | 1:52 PM ET

CBC News

A provincial cabinet minister says Toronto could increase taxes on businesses in order to help the city with its budget shortfall. But Ontario's premier and finance minister say it just won't happen.

Toronto wants to increase taxes on businesses, in order to avert a double-digit tax hike for homeowners.

Earlier this week, Mayor Mel Lastman warned that if the province doesn't lift its restrictions on taxing businesses, homeowners could face a tax increase of up to 20%. If Queen's Park were to allow for an increase, Lastman says homeowners would be looking at a 7% or 8% hike, up from the 5% increase he has mentioned in the past.

• FROM APRIL 4, 2001: Mayor warns homeowners could face 20% jump in taxes

But Finance Minister Jim Flaherty says he can't allow the city to increase taxes, because businesses already face an unfair tax burden compared with other municipalities, adding that a disproportionate burden is already placed on the commercial and industrial sectors.

Premier Mike Harris says he believes Toronto has the capacity to keep taxes down without increasing business taxes.

Labour Minister Chris Stockwell has also been involved in the dispute. He was asked Wednesday whether the city could increase residential taxes by 7% or 8%, and tax businesses a lesser amount, such as 2.5%.

"Yes, yes, that's the kind of proposal that if they brought to us I think we would look at with reason," he said.

But Aynsley Wintrip, an aide to the finance minister, says Bill 140 (the Continued Protection for Property Taxpayers Act) prevents Toronto from putting a tax increase on businesses.

Wintrip notes that until now, Stockwell and the finance minister have been on the same page regarding the issue of business taxes. She says she doesn't understand why the labour minister has changed his mind.