If Olivia Chow is going to raise property taxes, here’s why she should look toward her mayoral challengers for ideas

By embracing some of her opponents’ better plans about property taxes, can the new mayor fill the gaps in her own platform?

Thestar.com
July 4, 2023
Matt Elliott

Olivia Chow broke barriers last week when she was elected Toronto’s next mayor. After she officially takes office on July 12, she’ll be the first woman to achieve the title since amalgamation. She’ll also be the first racialized person to hold the job since, well, ever.

And while not as monumental -- except maybe to the nerdiest of municipal policy wonks -- it’s worth noting another barrier broken: she’ll be the first Toronto mayor in recent history to win on a platform of raising property taxes.

Chow’s victory is a knockout punch to the conventional wisdom that says you can’t win if you don’t promise to keep increases to Toronto’s residential property taxes -- which are among the lowest in the GTA -- at or below the rate of inflation.

It also gives her real flexibility to address Toronto’s many challenges. Former mayor John Tory, elected and re-elected twice while making the inflationary property tax promise, ended up trying to run the city while wearing the fiscal equivalent of handcuffs. Tory’s inflationary property tax increases didn’t even provide enough funds to keep up with population growth and proved to be a recipe for civic decline.

Chow has a real opportunity to chart a better path, but it’s one rife with political danger. Toronto’s conservative establishment is itching to cast Chow as a tax-and-spend politician who keeps raising property taxes with little to show for her efforts.

To head that off, Chow might want to consider co-opting a few of the better ideas offered by some of her opponents in the mayoral race.

Candidate and city councillor Josh Matlow, for example, offered a dedicated “City Works Fund” -- a two per cent property tax levy. The name echoes Tory’s 1.5 per cent annual “City Building Fund” property tax levy dedicated to the capital cost of building transit and housing.

The rationale for a new dedicated levy is simple: a new bus or streetcar isn’t worth much if you can’t afford to pay drivers. And new housing means new residents, who will want more recreational programs, more library hours and other municipal services.

A two per cent annual increase works out to just $67 extra for the average household but would raise big money: about $234 million a year by 2026, according to Matlow’s platform, which was reviewed by former parliamentary budget officer Kevin Page. That’s enough to offset the cost of restoring TTC service cuts, increasing library hours, improving snow removal and hiring more mental-health response teams, with enough left over to fill a bunch more potholes.

By creating a dedicated fund to pay for service improvements, Chow could offer accountability for her tax increases. I’m imagining signs posted in places all over Toronto: “These extended library hours are brought to you by the City Works Fund,” “This bus service is brought to you by the City Works Fund” and so on.

Make it crystal clear what services these increased taxes are paying for, so that anyone who opposes them must explain why those services should be cut.

Still, Chow might also face criticism that increased taxes will make life less affordable. Chow has rightly pointed out that the city already offers programs for low-income seniors and people with disabilities that take the sting out of property tax hikes, but an expanded tax relief program could be good politics.

Mayoral candidate Mitzie Hunter, in her platform, proposed a plan to rebate 50 per cent of the annual property tax increase to households earning less than $80,000 per year. It’s an idea worth studying, as it would be a real step toward making Toronto’s property tax system more progressive.

And here’s one more idea worth considering. Increased spending at city hall won’t have the impact it should if city departments remain dysfunctional. City hall’s recent CafeTO challenges, for example, with long delays and patio permit rejections, were in part the result of three departments getting tasked with the roll-out process, with no one really in charge.

Policy analyst Chloe Brown, who ran another strong mayoral campaign after a third-place finish in last fall’s election, offered as part of her platform a sensible restructuring of city hall, replacing today’s labyrinth of bureaucracy with a “strong commissioners” system, in which eight divisional managers would have clear responsibilities. It’s the kind of structural change city hall could use to ensure money is being spent effectively.

By embracing some of her challengers’ better ideas, Chow can fill the gaps in her own platform -- which was pretty light on specifics -- and combine pieces into a kind of municipal policy Voltron. Because Chow has the freedom to raise revenue, she’s the first mayor in a long time with an opportunity to bring about real service improvements. It won’t be easy -- but at least it’s possible.