Toronto City Council votes to explore new revenue options, including parking levy

Cp24.com
Feb. 8, 2023
Joshua Freeman

Toronto City Council passed a motion Tuesday asking city staff to report back on new revenue options, including a possible parking levy, as the city continues to deal with serious revenue shortfalls.

Mayor John Tory brought the motion forward and made the item his first key matter at Tuesday’s council meeting.

It asks staff to report back to council in the third quarter of this year with an updated assessment of revenue generating options available to the city under existing provincial legislation.

The move comes as higher levels of government turn a skeptical eye on funding requests for Canada’s largest city.

The Ontario government has said it will send in auditors to assess the city’s finances as it mulls how much compensation to provide Toronto in the wake of a provincial housing plan which blocked the city from collecting some fees from developers.  The move is expected to cost Toronto upwards of $200 million a year.

Critics have charged that the province has taken money out the pockets of cities in order to offer a break to developers, but Premier Doug Ford has said he’s sure much of the lost revenue can be recouped by cutting waste.

The federal government has also left the city hanging in terms of hundreds of millions of dollars in much-needed pandemic relief funding.

Speaking to council Tuesday, Tory suggested the city may need to explore all options available so that those governments are not able to dismiss funding concerns out of hand.

“In the context of discussions that I have with the other governments, it's constantly thrown back at me, ‘well you have tools you're not using,’ or you have tools you're not using properly’ or ‘you have reserves that are too high,’ which is rubbish or ‘you have taxes that are too low.’”

He said the idea that the city is not managing its finances is used by the province and the federal government as “an excuse” to avoid a conversation about properly funding cities.

There is currently no requirement for the federal or provincial government to provide cities with any regular money, though regular funding for large cities from higher orders of government is common in other parts of the world.

In that vein, Coun. Mike Colle moved an amendment to the motion that staff include in their report the total amount of tax paid by Toronto residents to all three levels of government and what percentage of that leaves the city to pay for programs and infrastructure elsewhere. He referred to a previous staff report which suggested that 80 per cent of taxes paid by Toronto residents and businesses leave Toronto. 

Included in the list of possible revenue options staff will explore are a parking levy, which would be assessed to property owners, as well as a vacant storefront tax.

While the City of Toronto Act allows Toronto to implement revenue tools to help meet its needs, some require provincial approval or cooperation. Ontario has previously blocked the city from enacting them. For example then-premier Kathleen Wynne denied Toronto's request to add tolls to the Don Valley Parkway and Gardiner Expressway in 2017, though she did agree to provide municipalities with a greater share of gas tax revenue.

There are a number of other possible ideas which would require the permission or cooperation of the provincial government, such as a motor vehicle registration tax, alcoholic beverage tax or tobacco tax. There are still others which would require an amendment to the City of Toronto Act, such as a municipal sales tax, cannabis tax or municipal personal income tax.

The parking levy has been explored before by council, but rejected. However the idea was recently revived by the transit advocacy group TTC Riders when they spoke out opposing hikes to transit fees and TTC service cuts.

Mayor Tory dismissed the idea at the time as having already been explored and rejected, but recently agreed it would be worth taking a fresh look at the option. 

His motion asks staff to assess how much money the city could take in through the various revenue tools, how much it would cost to implement the new revenue streams, and to look at how other municipalities have implemented similar tools.

The motion also asks the Toronto Parking Authority to complete a review of rates for on-street and off-street parking.

Tory has acknowledged that whatever new tools the city comes up with will be “limited” and that cities ultimately need a new funding arrangement with the higher levels of government as part of a “re-examination of a regime that was put in place in 1867” so that they are not constantly struggling to stave off financial disaster.

The motion passed 25-1, with only Coun. Stephen Holyday opposed.

Council also passed an amendment to the motion from Coun. Dianne Saxe asking that staff include an assessment of a parking levy’s possible impacts on Toronto’s climate goals.