Toronto city council votes to raise taxes, ignores calls for services review

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More spending, more taxes, more buildings, more government. That was on the agenda at City Hall Wednesday when the council met to approve the direction laid out by Mayor Olivia Chow.

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There have been calls for the city to establish its own sales, income and payroll taxes and to tax people flying in and out of the city. The council even voted to introduce a municipal lottery.

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The council approved the mayor’s plan to have the city consider building 25,000 new rent-controlled apartments. The vote ended 23-1, with only Councilman Stephen Holyday voting against.

Also on Wednesday’s agenda was a proposal to solve the city’s ongoing revenue problem by introducing several new taxes. City staff are advocating for a municipal sales tax, which isn’t possible without provincial approval, which there won’t be.

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Holyday criticized the idea, saying it would hurt the city’s efforts to attract new businesses and help the downtown core recover from the decline in business due to the pandemic.

“We need to look in the mirror because of the decisions we’ve made over time,” Holyday said.

Holyday said the real problem is that the city is constantly finding new ways to spend money faster than new revenue can come in.

Councilman Brad Bradford also said the city needs to be careful about how it spends its money and not just try to squeeze more out of residents through higher taxes or higher fees. He called on the city to conduct a review of core services, an exercise last undertaken in 2011 when Rob Ford was mayor.

“If we have that information for this council, it could be helpful in our advocacy with the provincial and federal governments,” Bradford said.

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Chow’s plan, supported by city staff, calls for several changes to the city’s financial framework with new funding from the provincial and federal governments. Bradford said the city needs to do its own work to find savings before seeking bailouts from other levels of government.

Bradford’s proposal to conduct a core services review was attacked and ultimately rejected by councilors Shelley Carroll, Alejandra Bravo, Jamaal Myers, Paula Fletcher and Chris Moise.

His council colleagues also rejected his proposal to raise the threshold for a reduction in local property transfer tax for first-time home buyers.

The current discount threshold is $400,000, the same as it has been since 2008, when this was the average price of a single-family home in Toronto. Bradford argued that first-time buyers deserve a break and suggested raising the discount threshold to $750,000, roughly the cost of a condo today.

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The council seems to be in the mood to raise more taxes and not offer breaks.

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Chow’s proposals to raise revenue beyond the municipal sales tax included a proposal to increase parking fees and increase the municipal property transfer tax on homes over $3 million. Councilwoman Dianne Saxe made a motion seeking permission from the province to implement both a municipal income tax and a payroll tax.

Fortunately, both of these motions failed, but a motion from Councilman Nick Mantas asking staff to consider a new tax on travelers flying through Billy Bishop Airport was passed by a vote of 14-9.

The council supported Chow’s so-called mansion tax on homes over $3 million or a three-bedroom home on a subway line. They also supported raising street parking fees to extraordinary levels, eliminating the $5-an-hour cap, and voted 21-2 to increase the failed vacancy tax from 1% to 3%.

For the concept of a municipal sales tax, the council voted 16-7 in favor, with Bradford, Holyday, Lily Cheng, Frances Nunziata, James Pasternak, Anthony Perruzza and Jaye Robinson voting against.

Taxes and spending are back in vogue at Toronto City Hall. Be afraid, Toronto, be very afraid.

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