Meanwhile, Robert Benzie and David Rider note (link is external) that Kathleen Wynne seems happy to give away public money to subsidize the privatization of not only Ontario Hydro but Toronto Hydro in the name of managing public money.
Premier Kathleen Wynne’s government will be all ears if Mayor John Tory asks for tax concessions to expedite the sale of Toronto Hydro.
But no such formal request has come from Tory, and Finance Minister Charles Sousa cautions the city would have to account for a 22 per cent provincial transfer tax.
“Toronto Hydro will be subject to the same conditions as everybody else,” Sousa told the Star in an interview.
That suggests the city could be on the hook for $220 million in transfer tax if a $1-billion stake in Toronto Hydro were sold.
“Toronto Hydro would have to abide by that transfer tax number,” the finance minister said, noting he lowered that levy to 22 per cent last year from 33 per cent. It will go back up to 33 per cent in 2019.
While there are write-offs the utility could use to reduce its transfer tax tab, the more complicated matter of a departure tax has yet to be determined.
They said Wynne’s administration is willing to listen to any pitch from the mayor and council — especially if the money the city saves in provincial taxes is plowed back into municipal infrastructure.
As a publicly owned company, Toronto Hydro now makes what are known as “payments in lieu of taxes” — or PILs — instead of corporate income tax.
“The departure tax is a mechanism that ensures taxes are appropriately collected when a company ceases to be 90 per cent municipally owned and leaves the PILs system,” she said.
“A company that pays a departure tax amount has had a gain on the value of its property while in the PILs system which needs to be recognized.”
Wynne stressed the province, which is selling off a majority stake in Hydro One, would not prevent Toronto from doing the same thing.
“It is up to the city of Toronto council and the mayor to have this discussion and to make a decision about their utility. It is up to them,” she said Thursday.
Energy Minister Glenn Thibeault has underscored that.
“The decision to privatize Toronto Hydro is up to Toronto city council. There are no ifs, and or buts . . . that is the council that makes the decision,” said Thibeault.
Still, NDP MPP Jagmeet Singh said he’s worried “the Liberals can encourage the privatization by offering special tax loopholes.
“The reality is the premier can make it a lot easier for Toronto Hydro and other local utilities to privatize if she gives the municipalities a tax break,” said Singh.
“So, the Liberal government can actually encourage this decision if they waive that tax,” he said, adding “it’s very clear that privatization increases costs.”
Wynne’s government is using $4 billion of the $9 billion it expects to raise from selling 60 per cent of Hydro One for new public transit, highways, and bridges. The remaining $5 billion will pay off the transmission utility’s debt.
Premier Kathleen Wynne’s government will be all ears if Mayor John Tory asks for tax concessions to expedite the sale of Toronto Hydro.
But no such formal request has come from Tory, and Finance Minister Charles Sousa cautions the city would have to account for a 22 per cent provincial transfer tax.
“Toronto Hydro will be subject to the same conditions as everybody else,” Sousa told the Star in an interview.
That suggests the city could be on the hook for $220 million in transfer tax if a $1-billion stake in Toronto Hydro were sold.
“Toronto Hydro would have to abide by that transfer tax number,” the finance minister said, noting he lowered that levy to 22 per cent last year from 33 per cent. It will go back up to 33 per cent in 2019.
While there are write-offs the utility could use to reduce its transfer tax tab, the more complicated matter of a departure tax has yet to be determined.
They said Wynne’s administration is willing to listen to any pitch from the mayor and council — especially if the money the city saves in provincial taxes is plowed back into municipal infrastructure.
As a publicly owned company, Toronto Hydro now makes what are known as “payments in lieu of taxes” — or PILs — instead of corporate income tax.
“The departure tax is a mechanism that ensures taxes are appropriately collected when a company ceases to be 90 per cent municipally owned and leaves the PILs system,” she said.
“A company that pays a departure tax amount has had a gain on the value of its property while in the PILs system which needs to be recognized.”
Wynne stressed the province, which is selling off a majority stake in Hydro One, would not prevent Toronto from doing the same thing.
“It is up to the city of Toronto council and the mayor to have this discussion and to make a decision about their utility. It is up to them,” she said Thursday.
Energy Minister Glenn Thibeault has underscored that.
“The decision to privatize Toronto Hydro is up to Toronto city council. There are no ifs, and or buts . . . that is the council that makes the decision,” said Thibeault.
Still, NDP MPP Jagmeet Singh said he’s worried “the Liberals can encourage the privatization by offering special tax loopholes.
“The reality is the premier can make it a lot easier for Toronto Hydro and other local utilities to privatize if she gives the municipalities a tax break,” said Singh.
“So, the Liberal government can actually encourage this decision if they waive that tax,” he said, adding “it’s very clear that privatization increases costs.”
Wynne’s government is using $4 billion of the $9 billion it expects to raise from selling 60 per cent of Hydro One for new public transit, highways, and bridges. The remaining $5 billion will pay off the transmission utility’s debt.
