Mississauga councillors slapped down Mayor Hazel McCallion’s efforts Wednesday to support a land-transfer tax that would have gone a long way towards containing the city’s looming budget crisis.

A frustrated McCallion fired back, warning councillors the city was running out of options.

“You can live with your infrastructure in bad shape,” she admonished. “If we’re not prepared to sell taxes to our citizens, then nothing’s going to happen … the (planned) LRT is not going to be built on Hurontario St.

“Folks, you’d better become realistic.”

Moments earlier, Councillor Nando Iannicca had called the proposed city land transfer tax “absolutely criminal.” He questioned where $12,000 in land taxes goes on the purchase of a $500,000 home. “You’re paying $12,000 to change names on the home.”

Councillor Bonnie Crombie and others cited a C.D. Howe report that was released to Mississauga council two days before its public debut on Thursday, in hopes it would convince them to abandon the idea of copying Toronto’s tax, introduced in 2008.

“The (report) showed (the land transfer tax) led to decreased home sales in Toronto. People chose to renovate instead of sell,” Crombie said.

According to the report, Toronto’s tax, which brought in $319 million last year, “resulted in, on average, a 16 per cent decrease in sales volume” — about 3,500 fewer transactions a year — and encouraged a 58 per cent increase in home renovations aimed at avoiding the double whammy of a provincial and city land tax.

Staff have estimated that if Mississauga were to ask the province for the power Toronto has to implement a land transfer tax, it could bring in an extra $74 million annually.

That would go a long way to dealing with the city’s mounting dilemma. For many years, property tax increases were kept close to zero, pushed by McCallion herself, while development dollars kept the burgeoning city flush. But Mississauga, now a mature city, faces a $1.5-billion-dollar infrastructure deficit as reserve funds and development dollars dwindle. City council is still trying to explain to residents this year’s decision to increase the city’s share of property taxes by 7.4 per cent.

Despite the looming shortfall, Councillor Frank Dale said he cannot support a tax that would come on top of other recent changes that have made it harder to buy a home.

He pointed to recent federal moves to reduce the maximum mortgage period from 35 years to 25, and to make down-payment requirements more stringent. He also mentioned Peel Region’s new development charge increase for new homes; buyers will probably end up paying much of the 99 per cent increase in charges, now an average of $35,500, up from $17,800.

Eventually, council agreed to defer any vote on a land transfer tax until staff comes back with a more detailed report on its potential impact on Mississauga.

After McCallion’s reality check, some councillors suggested the tax might not be a bad revenue “tool,” but took turns calling on senior governments to deal with the infrastructure crisis facing municipalities.

McCallion’s was the lone voice cutting through such talk.

She warned against relying on other levels of government and described the stark choice city council faces: do what’s politically unpopular or watch your city crumble.

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“When we increase the (property) taxes again this year we’re going to have huge support — isn’t it going to be great,” she said, sarcastically.

“I have to tell you, the future does not hold good: You have two choices: Do nothing and live with it; or do something and pay for it.”

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