Queen's Park kills York Region's hopes of imposing new taxes

Yorkregion.com
October 30, 2018
Lisa Queen

Queen’s Park has rejected York Region’s hopes of imposing new taxes -- which has left local officials wondering how they will raise millions of dollars a year to pay for infrastructure for the growing region.

The region, which is mandated by the provincial government to grow by 700,000 residents to a population of 1.8 million in 2041, has a shortfall of between $220 million to $264 million a year needed to pay for services such as roads and water and sewer pipes.

More than half of that is the region’s share of funding public transit projects, such as the extension of the Yonge Street subway to Richmond Hill, chief administrative officer, Bruce Macgregor, said.

If that burden was put entirely on York Region property taxpayers -- the chances of which are non-existent, Macgregor said -- the regional portion of the property tax bill would have to go up between 13 and 17 per cent a year.

To lighten the load on property taxpayers, council has been putting pressure on the provincial government to give it the same taxing powers Toronto has.

That would have included vehicle registration, land transfer, alcohol, entertainment and amusement, parking and tobacco taxes.

However, Premier Doug Ford’s new government has turned down the region’s demand.

Every year, people are being asked to pay more in taxes, user fees and service charges, often at rates higher than the rate of inflation, Municipal Affairs Minister Steve Clark said in an Oct. 2 letter to York Region chair Wayne Emmerson obtained by the York Region Media Group.

“Many have reached a breaking point where they have to choose between basic necessities,” he said. 

“As such, we are not looking to make changes to allow for new municipal revenue tools.”

While Macgregor said the region will continue to lobby the province for new funding sources, Frank Notte, director of government relations for the Trillium Automobile Dealers Association, which represents more than 1,100 new car dealers in Ontario, is applauding the decision.

“Minister Steve Clark made the right call to slam the brakes on giving York Region the power to impose a vehicle registration tax,” he said.

“I think people are fed up paying more in taxes and are demanding municipal governments find efficiencies in administration and better spend the money they already collect. According to a recent poll, 45 per cent of York Region residents would prefer the region first look at finding efficiencies to pay for infrastructure costs. That’s where council should spend their time -- not coming up with new ways to tax people.”

The region should work harder to tackle its debt, which peaked last year at $2.9 billion, the worst per capita municipal debt in the Greater Toronto Area, Notte said.

“One idea nobody (on council) seems to talk about is aggressively reducing today’s debt to free up money for tomorrow,” he said.

“Every penny the region spends servicing the debt is less money to spend on services like infrastructure and policing.”

But things are not that simple, Macgregor argued.

Just saying no to the provincial Places to Grow Act, which dictates population and employment growth in the Greater Golden Horseshoe, is not an option he said.

So, accommodating that growth means building infrastructure for new residents and businesses.

The region’s debt is a result of having to borrow money to pay up front for things like roads and sewer pipes before new development is built. Meanwhile, development charges on new construction do not fully pay for growth, Macgregor said. For example, they can’t be imposed to pay for new hospitals and highways.

Having growing, prosperous communities -- which need to be supported by public transit -- benefits provincial and federal governments financially so they need to contribute more to building and maintaining that infrastructure, Macgregor said.

“You can’t have a growth plan and fail to build infrastructure to support it,” he said.

Over the last decade, York Region has received about $3 billion from Ottawa and Queen’s Park for the extension of the Spadina subway and its bus rapid transitways.

That compares to $20 billion from senior levels of government for its rapid transit projects, Macgregor said.

“I’m not taking anything away from Toronto. Toronto probably needs that $20 billion. What I’m suggesting is we need more than $3 billion,” he said.

While the region has $2 billion in reserves to pay for “rainy day” projects, it needs more money to fund the next wave of rapid transit construction, Macgregor said.

“We can’t fund those sort of things while keeping a lid on property taxes,” he said.

“I think most people believe property taxes should pay for parks, garbage collection, community centres, fire, police, those sorts of things. I don’t think people expect on their property tax bill paying for rapid transit lines and subways. It would be extraordinary.”