Wynne open to request for Toronto Hydro tax breaks

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 writeoffs the utility could use to reduce its transfer tax tab, the more complicated matter of a departure tax has yet to be determined.

Senior government officials, speaking on background in order to discuss sensitive matters, say Tory has yet to formally ask Queen’s Park for any such tax breaks.

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.

Amanda Galbraith, Tory’s communications director, said Friday the mayor “had initial discussion several months ago with the premier about the fact that council has asked the city manager to report back on asset monetization, including Toronto Hydro.”

Galbraith added that the mayor’s office is “awaiting the report from the city manager, which was directed by council, around how we make best use of city assets to meet the growing needs of our city.

“To be clear: the mayor is not bringing forward anything. City council voted to direct the city manager to report back on this and other city assets.”

Toronto Hydro pays the city an annual dividend that amounted to $56 million last year. Sousa’s office said Friday that a departure tax would apply if public ownership of the utility fell below 90 per cent.

“The Ontario government does not possess the information necessary to calculate departure tax until the information is provided by the taxpayer, and once such information is provided it would be confidential taxpayer information,” said Kelsey Ingram, the treasurer’s press secretary. With files from Jennifer Pagliaro