Tory proposes 0.5% tax hike for transit and housing projects

TORONTO — Mayor John Tory is proposing a “modest” tax hike of 0.5 per cent to help build transit and housing projects throughout the city

He announced his proposal as part of his State of the City address at the Economic Club of Canada.

The proposed City Building Fund will come into effect in 2017 and would be funded in part by a 0.5 per cent levy.

The city currently has $17.9 billion worth of unfunded projects from 2016 to 2025 that have been approved by council, but lack the funds to pay for them.

“What I am proposing is an entirely separate levy that is for a five-year period that is just going to go in a designated fund to only build transit and housing projects,” Tory said.

It has been one year since Tory took a seat in the Mayor’s chair, where he campaigned on keeping taxes at or below the rate of inflation.

READ MORE: John Tory elected mayor: Here’s what he promised

“I believe I’m doing exactly what people expected me to do which is to be responsible in keeping taxes low when it comes to how we operate this city but also to get things done,” Tory said.

“I think they were fed up … they knew they were fed up with the fact they kept seeing announcement after announcement after announcement out of city hall on great new projects  to build a great new city and the projects never happened.”

Tory added this was because there was no money set aside for new projects.

“We are beginning that process today with this proposal that I am going to put forward to city council … and we will finally have a city building fund that allows us to move forward to build some of the things we must build,” he said.

Deputy Mayor Denzil Minnan-Wong said the money to fund necessary capital projects “has to come from somewhere.”

“We can’t just go to the money tree and harvest it. It just doesn’t exist,” Minnan-Wong said.

“If we can make a credible argument to them and say we are going to take a bit of your money and use it wisely and put it into a fund specifically for things like transit and we are not going to waste it, we can earn their trust.”

In his address, Tory said the projected growth of half a million people in the city during the next 25 years further necessitated a fund dedicated directly to expansion of transit and housing.

The mayor said the levy itself would last for five years and would amount to a contribution from the average home of about $13 per year, adding that it was “less than a trip to the movies,” and would make available “tens of millions of dollars” to invest in critical infrastructure.

In his announcement, Tory said the new levy would start in 2017, once the current Scarborough Subway levy expires.

Tory clarified the Scarborough Subway levy will be frozen at 1.6 per cent and will be folded into property taxes.

“We will stop adding a levy – specifically for the Scarborough Subway – at that time and this will replace the same levy that has been put on by my predecessor,” he said.

“I think this will be something that will now allow us to have a designated fund to support other housing and transit projects across the city going forward.”