Toronto city council voted on Wednesday to implement a set of measures intended to ease its more than $1 billion budget deficit.
Budget tools, such as land transfer taxes on high value properties, increases to vacant home taxes, commercial parking levys and foreign buyer land transfers, have been in place for some time.
However, “current provincial legislation limits City revenue options almost exclusively to the taxation of property and its related uses,” the City of Toronto said in a statement on Wednesday.
While its updated strategy will help to enhance existing policy, the newly ratified measures alone will not suffice, forcing the city to call upon provincial and federal powers for their “immediate and sustained support,” the city’s statement said.
“Council requested the Province of Ontario authorize new revenue tools that grow with the economy and reflect the scope and complexity of the fourth largest city in North America,” making clear that the absence of provincial and federal support would lead to essential service cutbacks that benefit the region, province and country.
In a press conference prior to council’s meeting on Wednesday, Mayor Olivia Chow called the current financial situation “desperate,” naming the items in front of council as refugees, housing and long-term financial planning, saying the three were undoubtedly “interlinked.”
In addition to the measures already in place council directed staff to action the following:
- Implement graduated Municipal Land Transfer Tax rates for high value residential properties valued at $3 million and above, for January 1, 2024
- Develop multi-year approach for property tax rates
- Remove on-street parking rate cap to enable a comprehensive rate review
- Report back on increasing the Vacant Home Tax rate from one to three per cent
- Request the TTC work with the city and the Toronto Arts Council to increase ridership.
Council also requested staff reports for the introduction of the below new revenue and policy tools:
- A Foreign Buyer Land Transfer Tax
- A Commercial Parking Levy
- A dedicated 911 Next Generation levy
- An Emissions Performance Charge for buildings
- An additional land transfer tax on buyers of residential property where the purchaser owns more than one property within Toronto, with appropriate exemptions
Council also requested staff reports to explore reducing expenditures and forgone revenues, optimizing asset management and the feasibility of additional revenue tools:
- Restructure or dissolve the Imagination, Manufacturing, Innovation and Technology (IMIT) Financial Incentive Program
- Reduce or remove non-residential non-ground floor area development charge exemptions
- Review surplus and underutilized real estate assets to maximize greatest value and/or use
- A levy per passenger from Billy Bishop Toronto City Airport
- Graduated municipal property tax rates for high value residential properties and for properties that are not the owner’s primary residence
- A municipal lottery.
But previous efforts made in conjunction with Wednesday’s decisions are “still not enough to address the 2024 Budget shortfall and the City’s long-term financial crisis,” the city’s statement said.
The city is fighting off “real and urgent consequences starting next year if additional actions are not taken by the Government of Canada and the Province of Ontario, the statement concluded.”
Even with these measures in place “we still need our partners – the Government of Canada and the Province of Ontario – to step up for the people of Toronto,” Mayor Chow said.
The updated Long Term Financial Plan and accompanying staff report is available on the City’s website.
