The 2017 federal budget unveiled Wednesday drew praise from Toronto's mayor and budget chief for promising money toward transit, housing and childcare. Meanwhile, Ontario's own budget is expected later this spring.
On CBC Radio's Metro Morning, Ontario Finance Minister Charles Sousa weighed in on how the federal budget will inform Ontario's spending, and what he'll do to cool Toronto's housing market and ease the loss of the Public Transit Tax Credit.
Questions and answers have been condensed
Matt Galloway: One thing that's notable in this budget is that the tax credit for those who are taking transit has been cut. That is disproportionately going to hit those on the lower end of the income spectrum. What good is increasing funding for transit if people can't afford to take it?
Charles Sousa: I don't know why that decision was made to eliminate the tax credit, but I presume it may have been that they weren't getting the uptick they were hoping for. Either way, we need to provide support and encouragement [for transit].
MG: Is that something you would look at in your budget, trying to replace that or giving people some relief?
CS: It is something we want to do to encourage use of ridership in a variety of forms. I've haven't taken a look at a tax credit specifically for the use of public transit but I am looking at ways to make it easier and more effective to use public transit. I don't know why the federal government did that, but we're going to continue to invest. And there's other things we can do, there's riders in the Toronto area and there's riders up in the 905 and the 519 areas who are trying to come in and out of the city as well. And of course, there's a need for me to provide for transit in places like Ottawa, and Thunder Bay and elsewhere.
MG: You sent a letter to Finance Minister Bill Morneau, asking for some assistance in dealing with the housing market here. You wanted an increase in the capital gains tax, and that decision was delayed. What does the delay mean?
CS: We have to be careful about the unexpected consequences of things we do [to cool the market.] Eliminating the capital gains exemptions on those that are flipping homes — in essence, there are a number of people that are going into new subdivisions and scalping these new properties, holding them hostage, and crowding out families trying to buy in. That gain that is being made by that individual should be taxed accordingly, they shouldn't be exempt from not paying any tax. Right now, they only have to pay 50 per cent. I suggest that on those speculative deals they should be taxed the full amount.
MG: If the federal government's not going to do something, are you looking at introducing something that would tax those who are speculating?
CS: It's a lot easier to do when we have the CRA [Canada Revenue Agency] because the CRA are the ones who collects these taxes on behalf of the province, because we harmonized our systems. But we're looking at a number of things. I have a working group with the federal government and also with the British Columbia government to determine how to best deal with these issues. We obviously know that the real dilemma here is the degree of supply to keep up with the demand. It's important that Ontario is attracting all of this attention and it's a reflection of our growing economy that the supply mix is not getting to the market as quickly as it needs to be, and that's the real issue. I'm looking at a suite of things — we've frozen some of the taxes on apartment buildings that pay exorbitantly more than a condominium. We've introduced a land transfer tax deduction for first time home buyers, up to $4,000 to help them get into the market, but still, it's the bidding wars that are crowding people out.
MG: You've announced the idea of 100,000 childcare spaces — that's province-wide, and there's some question as to when those would come into effect. What is your plan for the childcare crisis in Toronto?
CS: It is becoming more problematic, 100,000 spaces are starting in 2017. We're putting up 3,400 spaces immediately, and try to find a way to ban those waitlist fees. The seven billion over ten years is not new money that the federal government's proposing, it's something they already made a commitment to. But working on a provincial and national framework is a good thing. As far as the province, as we proceed forward, we'll be elaborating on how we're going to support further work for childcare and it's a priority for our government