Two controversial tax proposals are on the city’s chopping block because of angry residents and a lack of expertise within Toronto’s civil service.
On Wednesday, staff reports to city council’s executive committee recommended suspending work on the stormwater surcharge — also known as the “rain tax” — and pausing action on a parking lot tax until a provincial Crown corporation lends a helping hand.
A parking lot tax has been on the council agenda for some time and is seen as a way for the cash-strapped city to raise revenue, reduce congestion and encourage greater transit use.
According to the staff proposal, it would apply to privately and publicly owned off-street parking lots that have more than 10 parking spaces.
The tax could’ve brought in between $100 million and $108 million per year, “a reliable and significant source of annual revenue to the city which could be used to sustain critical municipal services, including transit,” staff said.
Despite the benefit to city coffers, staff said they couldn’t implement it without more information from the Municipal Property Assessment Corporation (MPAC), a provincial Crown corporation responsible for assessing property values, to help iron out how much surface parking there is in Toronto.
While the two sides have been working together over the past year, “it has been made clear that in order to successfully implement a commercial parking levy and ensure it is applied fairly, consistently and clearly, MPAC's involvement is critical based on their unique service offerings,” staff said.
MPAC’s continued participation in the process “is subject to their board’s approval and may require engagement with the appropriate provincial government officials,” the report said. Until then, staff said implementation should be “deferred.”
If MPAC doesn’t come to the table, it could put the effort on even thinner ice.
“City staff anticipate that there are no immediate alternative service providers who can provide the same services,” staff said. “Seeking out an alternative service provider would impact program timelines, design, and net revenue potential.”
In a statement to TorontoToday, MPAC said it “values” the relationship with Toronto and is “pleased to explore this and other opportunities to support municipal objectives.”
“We look forward to continuing to work closely with the city on this project and contribute our assessment expertise.”
A spokesperson for Finance Minister Peter Bethlenfalvy poured cold water on the Ford government providing any help.
"Our government does not support raising taxes or fees on the people of Ontario. To support Toronto we signed a historic $9-billion New Deal to help ensure their financial stability without the need to raise taxes," said Colin Blachar in a statement to TorontoToday.
TTCriders and the Toronto Environmental Alliance, two advocacy organizations that have long backed the proposal, deplored the news and said the city is being held “hostage” by MPAC.
“There’s no indication of why MPAC stopped participating, or when we will get answers,” the two groups said in a joint press release.
“For years, we’ve been told that a commercial parking lot levy tool was within the City of Toronto’s power to implement. It’s shameful and disappointing to learn that what’s been standing between transit riders and better service is a group of unelected MPAC executives,” said Shelagh Pizey-Allen, executive director of TTCriders.
Rather than a rain tax, property owners could get subsidies instead
The stormwater charge was killed because of negative feedback from stakeholders during consultations and additional work the city is doing to reduce stormwater runoff.
The measure was first proposed as a way to generate revenue from industrial, commercial and institutional property owners that own vast swaths of paved surfaces — which can exacerbate the strain on the city’s sewer systems during heavy rainfalls — to help pay for flood mitigation efforts.
Rather than using a new tax to incentivize landowners to modify their property so it doesn’t burden city infrastructure, staff recommended providing property owners with subsidies instead.
To cut down on water run off, staff suggested the city offer “new subsidies to property owners to install green infrastructure, reduce impermeable surfaces, thereby reducing stormwater runoff on private property.”
Staff will prepare a report on a new program and provide it to council no later than the fall.
