Opposition to the Implementation of a Municipal Land Transfer & Alcohol Tax

· by m.hardill@hamiltonchamber.ca

Dear Mayor Horwath and City Councillors,

On behalf of the Hamilton Chamber of Commerce, I am writing to express our deep concerns regarding the proposed Municipal Land Transfer Tax (MLTT) that will be considered by Council on January 15. While we recognize the financial pressures facing the City of Hamilton, the implementation of an MLTT would be a step backward in addressing housing affordability and would have detrimental consequences for economic development and talent retention in our community.

Housing affordability remains a critical issue for Hamilton. With home prices and rental rates escalating beyond wage growth, introducing a MLTT would add a significant upfront cost for homebuyers, exacerbating the existing barriers to homeownership. For a typical Hamilton home priced at $750,000, this tax would equate to an additional $11,475—a financial burden that could delay or entirely prevent many residents, especially younger Hamiltonians, from realizing their dream of homeownership.

This tax risks undermining the competitiveness of Hamilton as a destination for talent and investment. Hamilton has worked hard to position itself as an attractive and accessible place for individuals and families to live, work, and thrive. However, by increasing the cost of housing transactions, an MLTT will likely discourage prospective buyers and push them toward neighboring municipalities, leading to a loss of talent, economic activity, and community vibrancy.

Furthermore, imposing an MLTT sends a concerning signal about the City’s approach to addressing the housing crisis.  Hamilton residents have made it clear that affordability is their top priority. According to Abacus Data, 84% of residents believe housing is unaffordable, and nearly all young adults aged 18 to 44 express grave concerns about rising housing costs.  Policies like the MLTT that increase the financial burden on homebuyers does not align with the urgent need to prioritize affordability and accessibility.

Similarly, a municipal alcohol tax in Hamilton could significantly disadvantage local restaurants and bars, creating an uneven playing field in the region. Residents and consumers, faced with higher prices will opt to visit establishments in neighboring cities or towns where such taxes do not apply. This shift in consumer behavior would affect Hamilton’s businesses, reducing their revenue and profitability.  Moreover, the added tax burden would deter new businesses from setting up operations in the city, while existing establishments might struggle to compete with nearby venues offering more affordable options. Ultimately, the tax could undermine the growth and sustainability of Hamilton’s hospitality sector, pushing consumers and economic activity beyond the city’s borders.

With half of Canadians $200 or less away from being unable to cover their monthly bills, rather than introducing additional taxes, we urge Council to focus on solutions that foster housing supply and affordability. This includes accelerating housing development, streamlining approval processes, and collaborating with all levels of government to unlock funding for affordable and attainable housing projects. At a time when Hamilton’s housing market is at a tipping point, the focus must be on removing barriers to homeownership and creating a sustainable housing ecosystem.

We understand the City’s need for alternative revenue sources to address budgetary shortfalls. However, just as Hamilton households are tightening their budgets during economic uncertainty, so too must the City scrutinize expenditures and prioritize fiscal responsibility.  An MLTT and alcohol tax are reactive measures that could exacerbate Hamilton’s affordability crisis and undermine confidence in local leadership.

The Hamilton Chamber of Commerce strongly urges Council to reject the Municipal Land Transfer and alcohol tax proposal and instead prioritize policies that promote affordability, economic growth, and community well-being.  We strongly caution against adopting revenue measures that risk discouraging individual and business investment in Hamilton, ultimately threatening the vibrancy and economic health of our community. 

We remain committed to working with Council and the broader community to find innovative and equitable solutions to Hamilton’s financial and housing challenges. Thank you for considering this important perspective.

Sincerely,

Greg Dunnett
President & CEO
Hamilton Chamber of Commerce