Leftist Chow Secures Toronto Mayoralty, Promises Tax Hikes

Left-wing candidate Olivia Chow has secured the mayoralty of Canada's most populous city and financial centre, Toronto, following the 26 June by-election. Chow, a former MP for the left-wing New Democratic Party (NDP) won 37.2% of the vote compared to 32.5% for former deputy mayor Ana Bailão on 32.5%. Usually a mayoral contest would not be of market interest, but the oversized impact that Toronto has on Canada's fiscal outlook and financial system means the policies of its municipal leader can have an impact outside the city limits.

• The Globe and Mail highlightsa potential showdown between Chow and the federal gov't, "The city is short CAD1.4-billion for last year and this year, and is seeking provincial and federal support that has not been forthcoming. The city is also facing a shortfall of nearly CAD50-billion over the next decade for its operating and capital expenses."
• In response to the budget shortfall, Chow has proposed an increase in Toronto's property taxes, vacant home taxes, and land transfer tax on +CAD3mn homes.
• While the election was won on resolutely local issues around housing and public safety, given the strong prospect of a snap election in Canada before the end of the current parliamentary term in 2025, Chow's win will garner some wider political attention.
• Metropolitan Toronto's ridings remain strongholds for PM Justin Trudeau's centre-left Liberals. However, a win for the former NDP MP Chow could give the leftist party a greater platform in the city to challenge Liberal incumbents.