Olivia Chow says her property tax increases will be “in line” with inflation, “all in,” after she cancels the Scarborough subway extension in favour of light rail — and that she will cancel the tax hike now tied to that subway.

The Toronto mayoral candidate said on CBC’s Metro Morning early Monday that her plan to kill the subway would “give us the fiscal room to build that relief line, to increase better bus service, to do the housing we need, to fix the housing that is now falling apart, TCHC.”

The ambiguous phrase “fiscal room” — and her spokesman’s comment later that she will “reallocate funding for the Scarborough underground” to other priorities — appeared to suggest she would retain the 1.6 per cent tax hike intended to be dedicated to the subway, while abandoning the project itself.

Chow offered a clarification in an interview later in the day.

She would cancel the tax increase, she said emphatically. By “fiscal room,” she said, she meant that giving up the subway would give the council new flexibility to borrow if needed for other key investments, no longer saddled by hundreds of millions of dollars in subway-related debt that would push the city close to its self-imposed debt-payment ceiling of 15 per cent of property tax revenues.

She said her tax hike would be “in line” with inflation. She would not, she said, impose an inflationary increase over and above the increase once intended for the Scarborough project.

“You’re either in line with inflation or you’re not . . . We need to make sure it’s in line with inflation, no more, no less,” she told reporters at an appearance at the CityTV studio.

Before Chow’s clarification, rival John Tory accused her of proposing to repurpose the subway tax as a “slush fund for undetermined projects.” Chow, he said, “has demonstrated a complete lack of respect for taxpayers.”

The province had planned to pay fully for a seven-stop light rail extension. The three-stop subway project council approved instead, at the urging of Mayor Rob Ford and then-TTC chair Karen Stintz, requires a 30-year local tax, intended to raise $745 million, and a $165-million increase to local development charges.

Tory, like Ford and Stintz, would build the subway if elected mayor, arguing that the city should not reopen the divisive, long-running debate. Chow and David Soknacki would attempt to revert to light rail.

The tax levy, a 0.5 per cent hike this year, will rise to become a 1.6 per cent total hike in 2016 (or about $40 on the average tax bill), and stay at that level for about 30 years.

Inflation is currently low, between 1.1 and 1.5 per cent. An inflationary hike would be smaller, in nominal terms, than three Ford-era increases.

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