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Taxpayers Federation: Canada’s largest city overpaying for construction $350 million a year

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From the Canadian Taxpayers Federation

Author: Jay Goldberg 

Favouring unions costs taxpayers dearly

They say less is more, especially when it comes to budgeting. Apparently, Toronto Mayor Olivia Chow never got the memo.

Canada’s largest city keeps overpaying on construction projects, to the tune of $350 million a year. The reason, in many cases, is that only union-affiliated firms need apply.

With modest construction contracting reform, Toronto could save a bundle and see property taxes frozen for 2025.

Over the past two years, Toronto politicians voted to increase property taxes by a whopping 18 per cent. Last year’s increase alone was 9.5 per cent.

Because of these massive property tax increases, many families were pushed to the brink.

Property tax bills for most Torontonians soared by hundreds of dollars over the past two years.

Yet so much of this pain could have been avoided with a little common-sense policymaking.

Would you refuse to even consider quotes from a non-unionized company? Or would you get quotes from everyone and then make your decision?

To nearly everyone on the planet other than Toronto’s zany politicians, the choice is obvious.

But when you’re a Toronto politician spending other people’s money, apparently open competition to find the best deal isn’t a priority.

Right now, Toronto uses a closed-tendering approach to award contracts for some of the city’s most expensive construction projects. That means only a handful of companies associated with a small group of unions can bid on those jobs.

Cardus, a non-partisan thinktank, released a report last year projecting Toronto was poised to award $1.7 billion in construction projects through a closed tendering process in 2023. Because Toronto only allows a small number of unionized construction companies to bid on those jobs, the cost goes up.

In fact, Cardus estimated Toronto taxpayers were set to overpay on construction projects in 2023 to the tune of $350 million due to a lack of competition.

Closed tendering used to be the norm in Ontario. Every city across the province overpaid on construction projects to cater to big unions.

That all changed in 2019, when the Ford government passed legislation allowing municipalities to open up the construction contracting process to real competition.

Sadly, Toronto has thus far chosen not to take advantage of the Ford government’s legislative reforms to save a boatload of cash.

But nearby cities sure have.

Consider the example of Hamilton.

Hamilton was one of the first cities in Ontario to take advantage of the Ford government’s reforms. Cardus estimates Hamilton is saving 21 per cent on its construction projects because the city opened up its contracting process. This single reform did a great deal to improve the city’s bottom line.

Yet Toronto politicians appear stuck in the past. During last year’s mayoral by-election, only two candidates, Councillor Brad Bradford and Anthony Furey, pledged to follow Hamilton in reforming construction contracts.

There has been no indication from Chow, who won that by-election, that this common-sense reform is even on the table.

Last year, Chow and council increased property taxes by 9.5 per cent, the highest property tax hike in Toronto’s history.

Had Chow implemented construction reform and saved the $350 million Cardus pointed to, last year’s property tax increase could have been wiped out entirely.

Think about that. Chow had a choice: save money through competitive bidding or hammer taxpayers with a huge tax hike.

The mayor picked the tax hike.

To break the cycle of massive property tax hikes, it’s high time Toronto looked at construction contract reform.

Taxpayers shouldn’t put up with politicians overpaying on construction contracts to the tune of hundreds of millions of dollars a year, only to see those same politicians turn around and impose record property tax hikes.

This isn’t just a problem restricted to Toronto: taxpayers from British Columbia to Quebec themselves face similar anti-competitive policies at the provincial level.

It’s time for politicians to put taxpayers, not unions, first.

Chow should implement common-sense construction contracting reforms to head off a massive property tax increase in 2025.

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2025 Federal Election

Three cheers for Poilievre’s alcohol tax cut

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By Franco Terrazzano

The Canadian Taxpayers Federation applauds Conservative Party Leader Pierre Poilievre’s commitment to end and reverse the alcohol escalator tax.

“Poilievre just promised major alcohol tax cuts and taxpayers will cheers to that,” said Franco Terrazzano, CTF Federal Director. “Poilievre’s tax cut will save Canadians money every time they have a cold one with a buddy or enjoy a glass of Pinot with their better half and it will give Canadians brewers, distillers and wineries a fighting chance against tariffs.”

Today, federal alcohol taxes increased by two per cent, costing taxpayers about $40 million this year, according to Beer Canada.

Poilievre announced a Conservative government “will axe the escalator tax on wine, beer and spirits back to 2017 levels, ending the automatic annual tax increases.”

The alcohol escalator tax has automatically increased excise taxes on beer, wine and spirits every year, without a vote in Parliament, since 2017. The alcohol escalator tax has cost taxpayers more than $900 million since being imposed, according to Beer Canada.

Taxes from multiple levels of government account for about half of the price of alcohol.

Meanwhile, tariffs are hitting the industry hard. Brewers have described the tariffs as “Armageddon for craft brewing.”

“Automatic tax hikes are undemocratic, uncompetitive and unaffordable and they need to stop,” Terrazzano said. “If politicians think Canadians aren’t paying enough tax, they should at least have the spine to vote on the tax increase.

“Poilievre is right to end the escalator tax and all party leaders should commit to making life more affordable for Canadian consumers and businesses by ending the undemocratic alcohol tax hikes.”

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Business

Saskatchewan becomes first Canadian province to fully eliminate carbon tax

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From LifeSiteNews

By Clare Marie Merkowsky

Saskatchewan has become the first Canadian province to free itself entirely of the carbon tax.

On March 27, Saskatchewan Premier Scott Moe announced the removal of the provincial industrial carbon tax beginning April 1, boosting the province’s industry and making Saskatchewan the first carbon tax free province.

“The immediate effect is the removal of the carbon tax on your Sask Power bills, saving Saskatchewan families and small businesses hundreds of dollars a year. And in the longer term, it will reduce the cost of other consumer products that have the industrial carbon tax built right into their price,” said Moe.

Under Moe’s direction, Saskatchewan has dropped the industrial carbon tax which he says will allow Saskatchewan to thrive under a “tariff environment.”

“I would hope that all of the parties running in the federal election would agree with those objectives and allow the provinces to regulate in this area without imposing the federal backstop,” he continued.

The removal of the tax is estimated to save Saskatchewan residents up to 18 cents a liter in gas prices.

The removal of the tax will take place on April 1, the same day the consumer carbon tax will reduce to 0 percent under Prime Minister Mark Carney’s direction. Notably, Carney did not scrap the carbon tax legislation: he just reduced its current rate to zero. This means it could come back at any time.

Furthermore, while Carney has dropped the consumer carbon tax, he has previously revealed that he wishes to implement a corporation carbon tax, the effects of which many argued would trickle down to all Canadians.

The Saskatchewan Association of Rural Municipalities (SARM) celebrated Moe’s move, noting that the carbon tax was especially difficult on farmers.

“It puts our farming community and our business people in rural municipalities at a competitive disadvantage, having to pay this and compete on the world stage,” he continued.

“We’ve got a carbon tax on power — and that’s going to be gone now — and propane and natural gas and we use them more and more every year, with grain drying and different things in our farming operations,” he explained.

“I know most producers that have grain drying systems have three-phase power. If they haven’t got natural gas, they have propane to fire those dryers. And that cost goes on and on at a high level, and it’s made us more noncompetitive on a world stage,” Huber decalred.

The carbon tax is wildly unpopular and blamed for the rising cost of living throughout Canada. Currently, Canadians living in provinces under the federal carbon pricing scheme pay $80 per tonne.

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