Mayor John Tory's tax levy may be just the start

Even council's penny-pinchers say other levies will be needed to fix and build Toronto. But the options may spread the pain around more than a property tax hike.

Thestar.com
Dec. 4, 2015
By David Rider

The question at Toronto city hall is not whether council will approve Mayor John Tory’s infrastructure fund, but what other levies will be approved along with a property tax surcharge.

Official recognition that Toronto has a revenue problem, after four years of staunch denial under Tory predecessor Rob Ford, has sparked debate over which levies, tolls and taxes are coming. Some options hit regular taxpayers in the wallet, while others are aimed at shopping mall owners, condo builders and hotel operators.

“The mayor’s proposal will sail through council,” predicts Gord Perks, Tory’s prime council critic on budget matters. “The difficult debate will be setting the 2016 operating budget and coming up with a revenue tool that will really solve all our problems.”

Councillor Denzil Minnan-Wong, Tory’s deputy mayor, known as a right-leaning penny pincher, is in rare agreement with Perks that $65 million to $70 million in extra annual property taxes will not make a dent in transit and housing infrastructure needs. Unfunded capital projects of all types total $23 billion.

“There is general acceptance that we have been underspending on infrastructure, that money doesn’t grow on trees, and that if we build the things people want, money has to come from some place,” Minnan-Wong said Thursday.

“We have to be careful about the financial situation,” he said, acknowledging that other revenue sources are on the table. “Property taxes are not built to assume all costs associated with large infrastructure projects.”

The Toronto Taxpayers Coalition also acknowledges the city can’t expand transit, repair social housing and replace century-old sewage pipes with the money it currently collects.

But coalition president Andrea Micieli says the extra burden should not fall squarely on homeowners. She wants council to look at hiking development charges - an idea being championed by Councillor Justin Di Ciano - and get serious about selling or otherwise profiting from the city’s considerable property holdings.

Tory himself said Wednesday that his proposed property tax surcharge - 0.5 per cent in 2017, compounding to 2.5 per cent over five years - is just the start of the conversation.

The mayor considers the problem serious enough that he has almost certainly broken a 2014 campaign promise to limit tax hikes to inflation.

Proposals expected to be considered by council include a levy on commercial parking spaces including shopping malls, a hotel room surcharge, and a slice of the HST. Some, however, require permission from senior governments.

Councillor Janet Davis said one thing is clear - the city cannot rely on record-high land transfer tax revenues to keep the ship afloat. She wants the Ontario government to upload more costs and for council to invest more in services funded through the operating budget.

“The mayor has made a good first move, but this cannot be the end of the conversation.”