10/11/2011 03:24 EDT | Updated 12/11/2011 05:12 EST

Toronto Set For $140M Surplus

CP File

The City of Toronto is expected to have a $140 million surplus this year, thanks in large part to greater than expected revenues from the land transfer tax that Mayor Rob Ford has said he wants to dispense with.

The $139.3 million surplus was revealed Tuesday in a report prepared by city staff as an update on the city's financial situation. It will go before council's budget committee next week.

The main contributing factors to the surplus include:

- An intake of $79.5 million more than expected from the municipal land transfer tax.

- $22.5 million more than expected from supplementary taxes.

- $15 million in interest and investment earnings.

- Internal services that came $5.4 million under budget.

City budget chief Mike Del Grande said the city should not rely too much on this newfound money.

"This has been the whole issue of sustainability of the budget," said Del Grande. "That you don't use one-time monies to balance your budget. One-time monies are just that, they're one-time."

Del Grande wants to see the money go into a reserve fund in case the economy slows.

The land transfer tax has been a favourite target of Ford, who promised to get rid of it during his election campaign.

The land transfer tax will likely remain for the time being, but Ford has insisted its days are numbered.

In a July interview with radio station AM 640, Ford said he hopes to be able to phase out the tax in increments by 2014, despite also trying to bridge next year's budget gap that is estimated at between $500 million and $774 million.

The land transfer tax brings in about $300 million to the city's coffers, staff believe. The total Toronto budget stands at about $9.4 billion.

Coun. Janet Davis told CBC News that scrapping the land transfer tax would remove an essential revenue source the city needs.

"If mayor Ford wants to cut the land transfer tax, we'll be in huge trouble," Davis told CBC News. "It is generating $300 million a year for the city of Toronto and that's money that is ensuring programs and services Torontonians need will be able to continue."