Toronto exploring new taxes, parking levy to tackle budget deficit

Click to play video: 'Toronto requests taxation powers to overcome “unprecedented financial crisis”'
Toronto requests taxation powers to overcome “unprecedented financial crisis”
WATCH: Toronto requests taxation powers to overcome “unprecedented financial crisis” – Aug 17, 2023

Officials in Toronto on Thursday proposed several measures to tackle the budget crisis facing Canada’s largest city, seeking additional revenue through new taxes and raising rates of certain existing taxes.

A report from Toronto’s city manager Paul Johnson and the interim chief financial officer Stephen Conforti, which is focused on Toronto’s budgetary outlook, proposes a progressively increased land-transfer tax on high-value homes, raising the vacant homes tax from one to three per cent, and introducing a new commercial parking levy along with higher fees at on-street parking meters.

Click to play video: 'How much appetite is there for a Toronto sales tax?'
How much appetite is there for a Toronto sales tax?

The city is facing a combined operating and capital pressure of $46.5 billion in its budget over the next decade, according to the report.

Story continues below advertisement

The report also affirmed a warning that was featured prominently in the recent mayoral byelection that Toronto is facing an estimated 1.5-billion budget shortfall next year.

But both the report and Mayor Olivia Chow said the new measures wouldn’t be enough to balance the city’s budget.

Breaking news from Canada and around the world sent to your email, as it happens.

Toronto needs provincial and federal cooperation to allow it to implement new “revenue tools” including a new municipal sales tax that “applies to the purchase of goods and services in Toronto,” the report said.

Speaking to reporters at city hall, Chow said Toronto will do its part to address its financial issues, but other levels of government should help address its huge budget gap.

Chow said the city’s new measures and others would only cover about 30 per cent of the city’s financial needs over the coming years.

“After years of debate, we need to face facts,” Chow said.

“Time and time again the city has been asked to step up and fund for things that are (the) responsibility of other levels of government.”

Chow said Toronto operates 10 long-term care facilities even though health services are a provincial and federal responsibility, and the city is housing increasing numbers of asylum seekers, even though immigration is a federal responsibility.

Story continues below advertisement

“We’re asking them to step up and work with us so that we could grow our economy,” she said.

“Because having a vibrant and affordable city means a strong Ontario and strong Canada.”

Click to play video: 'Toronto housing market not keeping up with population growth: TRREB'
Toronto housing market not keeping up with population growth: TRREB

Last month, a two-page letter from Deputy Prime Minister Chrystia Freeland to Chow in response to Toronto’s request for additional help offered no new promise of federal funding.

Freeland, who is also the federal Finance minister, said the Ontario government has the constitutional responsibility and fiscal capacity to support Toronto.

The Financial Accountability Office of Ontario has projected a provincial budget surplus of $10.6 billion by the 2025-2026 fiscal year, more than the government-forecasted $4.4-billion surplus.

In response to the letter, Premier Doug Ford’s office deflected back to the federal government. A statement from a spokesperson in his office did not mention new support for Toronto’s budget shortfall, saying the city’s request for additional funding was directed at the federal government.

Story continues below advertisement

In an email to Global News, Caitlin Clark, a spokesperson for the premier’s office said the provincial government is “focused on keeping costs down for people, especially at a time when the cost of living is going up.”

“Moreover, at a time when Ontario is providing unprecedented financial support to municipalities and is committed to continuing to do so, we are working with Toronto on the third-party review of their finances to ensure taxpayers receive maximum value for money and the best possible services,” Clark said.

Clark said the Ford government will continue to work “in partnership with the city to build more homes, transit, and other critical infrastructure and ensure people continue to have access to the services they need.”

Toronto city’s executive committee will consider the new recommendations at a special meeting next week.

-With files from Global News

Sponsored content