Wednesday, May 03, 2006

McGuinty’s rent control: a $1 M house for under $1,500 a month

Shortly after the McGuinty government’s election in October 2003, the Toronto Star reported that “Dalton McGuinty has embarked on the ultimate urban challenge: finding an affordable house in downtown Toronto.”

In January, 2004, some vague details about the house – purchased by the Ontario Liberal party for McGuinty – were released to the Star’s Ian Urquhart:

The party bought a house for McGuinty in the tony Yonge-Summerhill area of mid-town Toronto. The price was in the high six figures.

That's beyond McGuinty's price range, even with his salary of $152,835 a year.

So McGuinty will rent the house from the party for an amount equivalent to the housing allowance for out-of-town MPPs, or about $1,460 a month - well below the market rate for the area.
--Toronto Star, January 31, 2004

The article also noted that “It is not unusual for political parties in Ontario to subsidize housing costs for their leaders. When Mike Harris was Conservative leader his party helped defray the cost of his $4,000-a-month waterfront condo.” An article in the Ottawa Citizen earlier that month reported that the PC party was paying $7,000 monthly to rent a house for former premier Ernie Eves, in the Cedarvale area of Toronto.

Two years later, the actual price the Liberal party paid for the house and mortgage details have not, to my knowledge, been publicly revealed. Hence, the public has no idea how much housing subsidy McGuinty is receiving from the party.

Below are the deed, mortgage and assessment documents for the house. I have whited out any information that might identify the property address. (I apologize for the poor resolution -- I was trying to keep the files to a manageable size.)

The purchase price was $995,000. Scotiabank’s commercial banking group has a $1,000,000 mortgage on the property.

As the Star reported, McGuinty is paying only $1,460 monthly to occupy the house, far less than its carrying costs.

To give you an idea of the costs, a $1-million dollar mortgage at 5% with a 25-year amortization period would require a monthly payment of $5,845.90.

The 2006 assessment for the house is $1,050.000. At this year’s mill rate, plus the 3% increase approved by council, that means an annual tax bill of $9,806.42.

Add in $300 a month for utilities and insurance (a modest estimate) and you get monthly costs of $6,963.10 (this does not include maintenance or repairs).

Minus McGuinty’s monthly contribution of $1,460, that’s $5,503.10 every month out of party coffers.

17 comments:

HearHere said...

That would be a taxable benefit under the canadian tax laws.

Would be for any of us I would think.

BBS said...

All the more interesting when you consider the Ontario Liberals are trying to paint John Tory as a privileged elite. Seems like Dalton likes his privliges too! He certainly enjoys those $5,000.00 dollar a plate fundraisers.

Anonymous said...

For those $5,000/plate dinners, people have to show up.
Second, with Gerard Kennedy running
for the leadership for the federal libs... his riding (mine) may be put up for bi-election. It is there
that we will send a message to the Dalton liberals about how unhappy we are with his gov't. This riding has always gone to the liberals. We can change that. They may think it's safe. Maybe we can change that. I wouldn't favour this but maybe the NDP can take it. It would
still send a message to these Ontario liberals. That's for sure.
Bi-Elections usually don't draw a lot of attention, but I have a feeling the media would be all over
this one. I'll certainly do my best
to help the Tories in this one.

Rob Hunter said...

Great digging, Joan! Throwing away money every month is an act the Liberals know well....

DC In YOW said...

anonymous,

According to an email exchange I had with a Toronto reporter, Kennedy has not resigned his Ontario seat and won't unless his riding association asks him to.

Kennedy should resign his Ontario seat on his own as John Baird, Jim Flaherty and Marilyn Churley all did when they made the committment to persue federal politics.

lyle bert said...

Nice to see Dirty Dalton is getting all the entitlements he's entitled to.

Ian Scott said...

What's the issue if this "subsidy" is coming out of provincial Liberal Party coffers?

I'd be damn pissed off if it was taxpayer money - but is this the case?

Sue said...

"....That would be a taxable benefit under the canadian tax laws...."

I doubt if McGuinty is paying the taxable portion. The Liberal party is probably paying for the tax on the tax on the tax...as well.


"...I'd be damn pissed off if it was taxpayer money - but is this the case?..."

In the end the taxpayer always pays even if the 'leaders' may tell you otherwise.

Joan Tintor said...

The issue is that, to my knowledge, this is the first time the purchase price and mortgage are coming to light.

The PCs also subsidized their leaders' accommodations -- which I noted up front.

When examples of party subsidy to leaders, ministers, MPPs, etc. has come up in that past, some people -- including some Ontario Liberals, I believe -- try to make the leap that taxpayer money IS involved because political contributions are tax deductible.

I don't necessarily agree with that take (it assumes that the money would otherwise have been taxed at the full rate) and I have not made that claim here.

I tried to present the facts in a straightforward manner and let people make their own judgments. Thanks for the comments!

cynical joe said...

Maybe its time that the Premier of Canada's largest province had an official residence. Lots of US states smaller than Ontario have this arrangement. One thing it does is take the politics out of the Premier's housing choice.

Anonymous said...

McLiar is a worse Premier than 'Rae days' Bob Rae - will the house be sold since they'll be out of power for years anyhow after the next election?

Donations to political parties are very tax deductible - that means we all subsidize parties whether we like it or not. So Million Dollar McGuinty has his rent subsidized by our taxes.

Rodney said...

Yes, this is very upsetting. These funds could better be used to pay for PC staff to go on pub crawls.

Or to send Chris Stockwell's family on a European vacation.

http://www.taxpayer.com/main/news.php?news_id=892

Anonymous said...
This comment has been removed by a blog administrator.
Jim Burnett said...

No wonder Dalton is sticking by Sorbara. He owes him big time!

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James said...

It makes sense.

rent control for Dalton McGuinty but not for Ontario's 4,000,000 tenants.