Province pours cold water on Toronto council request for sales tax for city-building
Finance Minister Charles Sousa says the provincial government won’t entertain a council request to share sales tax revenues because the city has powers to tax it is not using.

thestar.com
By Robert Benzie and Jennifer Pagliaro
Dec. 14, 2016

Finance Minister Charles Sousa is dashing the dreams of municipal politicians hoping for additional provincial money in their stockings this Christmas.

After Toronto council voted 30 to 12 to ask Queen’s Park for a share of sales tax revenue with municipalities, Sousa threw cold water on the request.

“I haven’t seen any submissions forwarded by the city, but it’s not something that, at this point, I’m prepared to entertain,” the treasurer told the Star on Wednesday.

“I’m not looking at that,” he said firmly of the request backed by Mayor John Tory. “There’s a number of powers that are afforded to them now.”

Although council asked the province allow the collection of a municipal sales tax if they were unwilling to share in harmonized sales tax (HST) revenues, Toronto councillors have many options to raise their own money, Municipal Affairs Minister Bill Mauro said.

“They already have a suite of revenue tools in the City of Toronto Act that they’re not using,” said Mauro.

The cabinet minister’s comments followed a letter signed by five big city mayors, including Tory, and sent to both the provincial and federal governments Tuesday asking for greater fiscal powers.

“You rarely have to ask permission to do the right thing. But this is the position our cities find themselves in as we attempt to do right by our growing populations,” the letter reads. “Our request is simple: give us the tools to do the job and the accountability that goes with them, and we’ll build great cities for the benefit of all Canadians.”

A statement from the mayor’s spokesperson Amanda Galbraith on Wednesday said Tory “will continue to press the federal and provincial governments to pay their fair share as we get on with investing billions in building overdue transit, repairing our roads and fixing our crumbling housing.

“By supporting the motion to ask the province for a share of the provincial sales tax, the mayor was making it clear that Toronto needs consistent, long term investment from the province,” she wrote.

Although the city has the power to tax the sale of certain entertainment, alcohol and tobacco, council had yet to do this.

The city previously charged drivers a personal vehicle tax, which brought in about $60 million annually at $60 per car until it was scrapped under former mayor Rob Ford in 2011.

Tory has said reviving that tax is a political deadweight in the city where a rhetorical “war on cars” has been often referred to. A motion from Councillor Kristyn Wong-Tam (Ward 27 Toronto Centre-Rosedale) to revive the vehicle tax Tuesday night failed 11 to 31.

Apart from property taxes, the city does not currently have tools that grow with the economy, such as a sales or income tax.

“Queen’s Park has consistently asked Toronto to be a mature order of government and make honest and difficult decisions to pay for its priorities,” said Councillor Josh Matlow, who moved the successful sales tax motion Tuesday.

“Residents will be disappointed to learn that the province is looking to close the door on the ability to fund the relief subway line, childcare, affordable housing and other critical infrastructure less than 24 hours after council finally selected a revenue tool that can actually support these needs and grow with the economy.”

Mauro emphasized that the provincial government is still “open and available to listen to all requests.”

“On the broader issue, we have given all municipalities significant financial assistance when it comes to the uploads” of services, he noted.

Councillor Mike Layton (Ward 19 Trinity-Spadina) said the province should give the city more resources to provide public transit.

“It’s in the hundreds of millions of dollars that the province should be on the hook for,” he told reporters Wednesday morning. “But, because of cuts made by previous provincial governments, that money is not coming.”

He said council made a “very important statement” on the sales tax vote.

“Municipal governments of the region deserve a portion of the sales tax in order for us to deliver on these important infrastructure projects,” he said.

On Tory’s plan to toll the Don Valley Parkway and the Gardiner Expressway, Transportation Minister Steven Del Duca said the province is all ears.

“We’re very well aware that the motion passed at city hall last night. The premier . . . has a very strong track record of working with Mayor Tory and all of our municipal partners,” said Del Duca.

“We are waiting to see a full and comprehensive plan from the city. When we see a plan, we will review it very, very carefully.”

Premier Kathleen Wynne has said her government will grant the city the permission it needs to toll the highways.

Queen’s Park still requires a formal request from city hall.

Galbraith said Tory would be sending the premier a letter “shortly” and council’s request on a sales tax would be relayed by city staff.