Contentious 'made-in-Toronto sales tax' goes before council
CBC
Toronto's grim fiscal outlook takes centre stage at city council today, with a raft of possible new taxes and fees up for consideration to avert the crisis.
All 25 city councillors will get their first chance to debate — and potentially change — measures city staff recommended last month to address what they called an "unprecedented financial crisis." Civil servants have laid out possible tax hikes including increases to the municipal land transfer tax, vacant home tax, and the creation of a parking levy to raise hundreds of millions in new revenue.
Councillors will also be faced with a staff recommendation to create a municipal sales tax, which could generate as much as $1 billion per year for the city. That, however, would require provincial approval and an amendment of the City of Toronto Act.
Mayor Olivia Chow's executive committee endorsed the plan late last month, but must now secure the approval of council to move it forward. On Tuesday, she urged councillors to work together to address the financial crisis.
"We know that we are stronger together," she said during a press conference. "And there's no dispute that every councillor understands that the City of Toronto is in a budget deficit situation."
Toronto faces $1.5 billion in budget pressures this year and those are projected to grow to $46.5 billion in operating and capital shortfalls over the next decade.
The city needs the help of both the province and federal government to address its financial crunch, Chow said. However, before council makes any formal requests, she said it needs to signal to other levels of government that it's doing its part to address the crisis.
"We need to have good working relationships with other levels of government," she said. "But prior to that, we need to come to the table with what we can do, what's within our power to do, and that's what's laid out in front of councillors."
The staff report details measures which, if approved by council, would take time to investigate and implement. The only tax hike in the report that could be enacted immediately is a proposed graduated municipal land transfer tax which would increase rates for homes worth more than $3 million.
On Tuesday, Chow pointed to that tax as something that will have no impact on people struggling to make ends meet.
"If you look at the solutions in front of people tomorrow at council, the one that we are enacting immediately is called a 'mansion tax,'" she said. "It is for people that are buying homes that are luxury homes, that are expensive."
City staff say that measure could raise $26 million per year.
Debate about the municipal sales tax could be one of the most contentious parts of the package proposed by staff.
Some have already spoken out against the measure, including Councillor James Pasternak, who represents York Centre, Ward 6. He said the sales tax will hurt people at a time when many are struggling with the increasing cost of living.
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