New Toronto taxes: John Tory’s moment of truth

theglobeandmail.com
June 24, 2016
By Marcus Gee

To his great credit, Mayor John Tory is very accessible to the media and usually very open to answering all manner of questions from reporters, but occasionally, when pressed, he can get a little testy. Consider a small exchange that happened on Wednesday.

The issue was new taxes - or, as they’re coyly called around City Hall these days, revenue enhancements. A consultants’ report that is going to city council’s executive committee came out this week. It sets out a menu of taxes that the city could impose to pay for the many pressing needs of a growing city, from better transit to decent public housing. They include a hotel tax, a parking tax, a beverage tax, a sales tax and a development levy.

The mayor said that discussions on the issue are well under way. Okay, a reporter said, but why shouldn’t the mayor, as leader of the city, just come out and tell people which of the taxes he favours? Here is where Mr. Tory seemed to get annoyed.

“Terrific for you to suggest that,” he said, but was the reporter advising that he do it “the morning after the report comes out,” without a proper chance to consider it? “Is that a reasonable request you’re making?”

He went on: “I will tell you right now I am going to show leadership on this.”

If Mr. Tory is feeling pressured, it’s no surprise. On this issue, he finds himself on the hottest of hot seats. He ran for office in 2014 on a promise to keep property-tax increases at or below the rate of inflation. Running against the self-proclaimed tax fighters Rob and then (when Rob got sick) Doug Ford, he argued that the hard-pressed taxpayer could not afford to be squeezed any more. But he also argued, quite rightly, that after years of delay, it was time for the city to build out its transit network.

The two promises are now at odds. Building all the projects the city has planned, from a Scarborough subway extension to more light-rail transit to Mr. Tory’s signature SmartTrack, is going to cost billions. Where are we going to find all that money?

The assertive city manager, Peter Wallace, has warned city councillors over and over that they can’t rely forever on budget dodges such as borrowing from reserves or count indefinitely on windfalls such as the money that pours in from a lucrative land-transfer tax. They are going to have to make some hard decisions about how to pay for all the things the city needs.

That time is approaching fast. This is Mr. Tory’s moment of truth. Will he stick his neck out and back the new taxes that the experts are telling him he needs to pay the bills?

Mr. Tory has a complicated history on the tax issue. When he first ran for mayor in 2003, he attacked his rival, David Miller, for musing about tolling Toronto highways to pay for transit. When he was out of office, he said he regretted making the attack and argued politicians should be straight with voters about the need for new sources of revenue to build transit. When he ran for mayor again in 2014, he was all about keeping taxes down again. No talk of new revenue tools. Then, a year after becoming mayor, he announced a “city-building” levy on property taxpayers to pay for the Scarborough subway - a tax, in other words.

Where, finally, does he stand? It’s not an easy one for any politician. Earlier in her premiership, Kathleen Wynne toyed publicly with taxes for transit, then balked. What politician wants to put a target on his back?

Backing a new tax would leave him open to attack from the right wing when he meets the voters again in 2018.

Already, the right is fulminating. Michael Ford, the nephew of Rob and Doug who is running for their old Etobicoke seat, fired off a news release this week warning residents that city hall is considering “a host of new taxes that will drive up costs around every aspect of our day-to-day lives.” The tabloid Toronto Sun warned on its front page: “Hang onto your wallets: Tory and pals eyeing up to $3.6-billion in new taxes.”

The left, meanwhile, is warning the mayor not to sell off precious city assets, like Toronto Hydro, to pay the bills. Some think he should just accept reality and abandon his pledge to keep property-tax increases low. He insists he won’t do that. So what will he do instead? Whatever it is, he is sure to get a rough ride.

But as Mr. Tory himself points out, this is an unusual time. After all those years of delay, plans are coming together for a big transit build out. All three levels of government are aligned on the need to get on with it.

“We have a difficult challenge in front of us,” Mr. Tory said in that exchange with reporters on Wednesday, “which is that we’re actually going to build this transit. We’re actually going to get on with doing some of these kinds of things as opposed to doing what we’ve always done before, which is to be champion hand-wringers, champion ideologues and champion polarizers that just decide it’s much more fun to have those debates than to actually get something done for the people of Toronto.” Well said. Time to get moving. And it falls on him to carry the flag.

Mr. Tory is right to say he shouldn’t be expected to show his hand just as the tax debate is getting started.

But neither can he expect just to sit back, see how it goes and let city council make the call. This one really does need strong leadership. Sooner or later, he will have to decide.