Toronto Mayor Olivia Chow is pledging to reduce a proposed increase to the multi-residential tax rate in the city's 2024 budget to protect renters.
Chow said on Monday she will make changes to the tax rate to prevent what are known as above-guideline rent increases, or AGIs. These increases allow landlords to increase rent by more than an provincially set guideline that allows rent increases for inflation.
Speaking to the Canadian Club in Toronto in a keynote speech, Chow said the reduction, which she will make in her draft of Toronto's budget, will help renters avoid high rent increases.
"They can't afford to pay more. We're not going to ask them to pay," Chow said at the Fairmont Royal York Hotel, noting one in two Toronto residents are renters.
"In my upcoming budget, I will reduce the multi-residential tax rate so no renters will face huge increases. That's what you want. That's what I'm going to do."
The mayor said she is acting on the advice of the city's budget committee, which asked her in a motion on Friday to consider lowering the proposed 4.5 per cent tax rate for multi-residential buildings. The mayor said a 3.75 per cent increase is below the threshold to prevent AGIs.
"That's where it will be. Would it be lower than that? I can't tell you," she said.
Some councillors have said the proposed multi-residential property tax rate, as recommended by city staff, could prompt landlords to apply to the Landlord and Tenant Board to impose AGIs. Landlords could argue that the proposed tax increase for multi-residential buildings could be considered "extraordinary."
Without approval from the board, landlords in Ontario are only allowed to increase rent for most existing tenants according to the province's annual rent increase for inflation. The guideline is set at 2.5 per cent for 2024. AGIs allow landlords to tack on up to an additional three per cent per year for such items as significant renovations or repairs.
Chow said she thought about the budget committee recommendation over the weekend and decided to accept it.
The mayor is due to present her draft of the spending package on Thursday. She declined to say where she will find savings in the budget to cover her reduction in the proposed multi-residential property tax rate.
"You will find that answer in three days on Feb. 1," she said.
Council is expected to hold its final budget debate at a special meeting scheduled for Feb. 14.