Tension between Toronto and Trudeau government inflamed by 2024 tax hike

As Toronto continues to gaze inward at its own tax proposals, a local Liberal MP has shared their outrage at the city’s decision to separate a portion of its proposed tax increase to blame the federal government for.

In the opening days of the budget process, the city’s budget chief warned that if the federal government didn’t commit to addressing the growing issue of shelter costs for refugees and asylum seekers, Toronto would have no choice but to increase taxes by an additional six per cent.

Calling it “the Federal Impacts Levy,” the tax is by design intended to elicit a federal response.

On Tuesday, Etobicoke Centre Liberal MP Yvan Baker responded to the threat angrily, taking a swing at Mayor Olivia Chow and accusing her of failing to find savings elsewhere.

“I’m outraged for a number of reasons. First, I’m outraged because if you have budget problems, the first thing you should do is look for savings,” Baker said. “Olivia Chow didn’t do that.”

Baker also repeated a line repeated for months by federal spokespeople that the city has received record funding from the Trudeau Liberals, including funding last summer to help cover the refugee crisis that was spilling over onto sidewalks.

City councillors have been quick to counter that the money the city received wasn’t enough at the time, and the needs have only grown since then. Outside a committee room, budget chief Shelley Carroll said the issue has been growing since the city first began engaging with the Trudeau government last spring. Hundreds of people fleeing persecution continue to arrive at Pearson airport, and Carroll pointed out that Toronto doesn’t have the jurisdiction to manage the influx.

“It’s now 5,800 (refugees) and it is growing every week and that is a direct response to federal actions and a federal policy,” Carroll said.

Coun. Gord Perks, the vice-chair of the budget committee, was much less patient in his response to Baker’s critique.

“Whether we’ve hit a nerve or we haven’t hit a nerve, I don’t much care,” he said.

“What I care about is that the federal responsibility take on the responsibility of people arriving in this country seeking refuge so that they have a chance at a decent life,” Perks said.

He’s accusing the Trudeau government of running away from its duty to cover housing costs for asylum seekers.

While the intended purpose of the tax threat is to put pressure on the federal government, Deputy Mayor Jennifer McKelvie said she’s hearing about it as well in her ward.

“At my town hall residents were aghast at the possibility of an additional six per cent,” she said.

McKelvie added that the idea of a tax increase on top of a record 10.5 per cent tax increase proposed by city staff has woken up residents to how big of an issue the refugee crisis is.

But McKelvie added that her residents’ ire is not focused on the city.

“There was a strong feeling this is an area of federal responsibility and there was a strong call for action for the federal government to step up,” she said.

In a statement issued late in the afternoon, Chow said she’s remaining hopeful a deal can be struck to satisfy the needs of the city.

“Funding and support for refugees is a gap in our budget so we need to address it,” Chow said. “All along I’ve said we have a great partnership and I know the Federal Government and Toronto MPs want to come through for Torontonians, like they have before.”