Mayoral candidate Olivia Chow is vowing to raise the land transfer tax on multi-million dollar homes by one percentage point in an effort to generate upwards of $20 million a year to expand school nutrition programs, increase rush-hour bus service and push ahead with an engineering study on a potential downtown relief subway line.

Chow made the announcement at her campaign headquarters Tuesday morning, calling the hike “fair” and "progressive."

“We need to invest in people now and I am being upfront in saying that in order to invest now you have to have new revenue,” Chow told reporters. “I would like to think that all progressive people, and there are many of them in this city, would rather see kids succeed in school (than save a little money) and would say ‘Yes, this is the way to go.’”

The current land transfer tax maxes out at two per cent for homes sold for $400,000 and up but Chow's plan would see another bracket added which would create a three per cent tax on homes valued at more than $2 million.

Chow said the increase would only impact about 500 home buyers every year and would allow about 36,000 additional students to have access to hot breakfast and lunches on a pay-what-you-can basis.

Mayor Rob Ford campaigned in 2010 on eliminating the municipal land transfer tax altogether, but was unable to do so.

Ford then proposed cutting the tax by five per cent in December, however a motion from budget chief Frank Di Giorgio and backed by the mayor was ultimately rejected by city council.

The municipal land transfer tax is levied on top of a provincial land transfer tax and provides the city with about $350 million in annual revenue.

"I don't believe that we can go into a campaign and say that somehow public transit will improve 10 years from now but you don't have to pay for that," Chow said. "We have seen that under Mr. Ford for four years and it just not an honest way to go."

Duguid endorses Tory

Elsewhere on the campaign trail Tuesday, Liberal cabinet minister and Scarborough-Centre MPP Brad Duguid threw his support behind mayoral candidate John Tory, saying the province needs a “strong municipal partner” to help with Ontario’s economic recovery.

Duguid, the Minister of Economic Development, Employment and Infrastructure, made the announcement at a news conference at Kennedy Subway Station in Scarborough on Tuesday morning.

While Duguid said the Liberal government will not be endorsing any municipal candidates, he said there is a great deal of support for Tory at Queen’s Park.

“I’m here as an MPP from Scarborough… who feels very strongly about Scarborough and feels very strongly about the importance of having a strong mayor for the City of Toronto,” he said. “My Liberal colleagues, I can tell you, at Queen’s Park are almost unanimously enthusiastic about John’s candidacy… I think over the course of the campaign, you are going to see many of them come out and express their views on that.”

During the news conference, Duguid also emphasized the need for a “stable council” to help move important infrastructure projects like the Scarborough subway extension forward.

Duguid said he would fight for the Scarborough subway extension "to his dying day," and said Tory's support for the project is part of the reason he wants to see the mayoral candidate elected.

"For 30 years I have been fighting for this and that fight is not going to end," Duguid said. "I think all of my colleagues from Scarborough are 100 per cent behind this subway proposal. We are going to get that subway built no matter what happens. The best way to do that is to elect John Tory."

Speaking to reporters Tuesday, Tory called the subway extension a "good long-term investment."

"We will attract jobs as I have said I will do and there are specific measures in my platform to attract jobs around that subway," he said. “I want to get on with this... and not reopen old debates and thus reopen old wounds. That doesn’t move us forward."

Meanwhile, the mayor's campaign manager Doug Ford told reporters at city hall that Duguid's endorsement should carry little weight with voters.

"He (Duguid) never stood up for the people of Scarborough. John Tory and Brad Duguid were nowhere to be found when the mayor and myself were fighting for the people of Scarborough. They can pretend that they got it but make no mistake about it; it was Rob Ford and the people of Scarborough that got that subway. It is a shame that he has the gall to come out and pretend that he is for subways."