Toronto council votes to boost taxes, ignores call for service review

City asked to consider sales, income and payroll taxes, municipal lottery

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

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There were calls for the city to adopt its own sales tax, income tax and payroll tax as well as taxing people flying in and out of the city. Council even voted in favour of starting a municipal lottery.

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Council endorsed the mayor’s plan to have the city look at building 25,000 new rent-controlled homes. The vote passed 23-1 with only Councillor Stephen Holyday voting against it.

Also on the agenda Wednesday was a proposal to fix the city’s ongoing revenue problem by bringing in several new taxes. City staff are advocating for a municipal sales tax, something that can’t be done without provincial approval, which won’t be forthcoming.

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Holyday was critical of the idea, saying it would hurt the city’s attempt to attract new business and help the downtown core recover from the drop in business due to the pandemic.

“We need to look in the mirror because of the choices we have made over time,” Holyday said.

Holyday said that the real problem is the city continually finding new ways to spend money and doing so at a faster pace than the rate at which new revenue can come in.

Councillor Brad Bradford also said that the city needs to look at how it is spending money and not just try to squeeze more from residents with increased taxes or higher fees. He called for the city to conduct a core services review, an exercise last done in 2011 when Rob Ford was mayor.

“Having that information for this council, that could be helpful in our advocacy efforts as we go to the provincial and the federal government,” Bradford said.

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

Bradford’s proposal to conduct a core services review was attacked by Councillors Shelley Carroll, Alejandra Bravo, Jamaal Myers, Paula Fletcher and Chris Moise and in the end was voted down.

His fellow council members also rejected his proposal to increase the threshold for a rebate on the municipal land transfer tax for first-time homebuyers.

The current rebate threshold sits at $400,000, the same place it has been since 2008, when that was the average price for a detached home in Toronto. Bradford, arguing that first-time buyers deserve a break, proposed increasing the rebate threshold to $750,000, which is roughly the cost of a condo apartment today.

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Council’s mood appears to be one of taxing more and not offering breaks.

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Chow’s proposals to increase revenue, beyond the municipal sales tax, also included a proposal to hike parking fees and increase the municipal land transfer tax on homes above $3 million. Councillor Dianne Saxe put forward a motion to seek permission from the province to implement both a city income tax and payroll tax.

Those two motions thankfully failed, but a motion put forward by Councillor Nick Mantas that called for staff to study a new tax on travellers going through Billy Bishop airport passed 14-9.

Council endorsed Chow’s so-called mansion tax on homes over $3 million or a three-bedroom home on a subway line. They also backed increasing street parking rates to extraordinary levels, doing away with the $5-per-hour maximum, and voted 21-2 in favour of increasing the failed vacant home tax from 1% to 3%.

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

Tax-and-spend is back in vogue at Toronto City Hall. Be afraid, Toronto, be very afraid.

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