New Toronto taxes will be on the table at executive committee meeting
CBC News | Posted: June 21, 2016 3:43 PM | Last Updated: June 21, 2016
Car tax back in the mix as councillors look for new ways to make ends meet
Mayor John Tory's executive committee will have a a raft of potential new taxes to sift through when it meets next week.
City staff on Tuesday released a list of 12 potential revenue tools that councillors on the executive committee will get a chance to debate next Tuesday.
Possible new taxes include:
- Alcohol tax (One-10 per cent)
- Entertainment tax (One-10 per cent)
- Motor vehicle registration tax ($20-$100)
- Parking levy (50 cents-$1.50 per spot, per day)
- Road tolls ($5-$20 per day)
- Tobacco tax (One-10 per cent)
- Development levy (Two-10 per cent)
- Hotel tax (Two-14 per cent)
- Municipal business income tax (0.5-two per cent)
- Municipal personal income tax (One per cent)
- Municipal sales tax (0.5-two per cent)
- Parking sales tax (Five-20 per cent)
The research was carried by the consulting firm KPMG earlier this year at the request of council after it became apparent that the city was not generating enough revenue to cover its commitments.
The first six taxes on the list could be passed by council without provincial approval, since they are covered by the City of Toronto Act. The last six would require Queen's Park's blessing.
The most lucrative tax for the city would be, by far, a municipal personal income tax of one per cent. KPMG estimates that would generate almost a billion dollars a year. However, it would require provincial approval to put in place.
The tax that KPMG believes could be up and running the fastest is the motor vehicle registration tax, which could be in place in six months. If it's chosen by councillors, the report suggests it should be between $20 and $100 per car, which would generate up to $94 million a year for the city. It also would not require provincial approval.
However, the $60 vehicle registration tax that was introduced by former mayor David Miller in 2007 proved to be widely unpopular. It was killed by former mayor Rob Ford in 2010.
The measure that would take longest to put in place is road tolling, the report states, which could be three years in the making and generate up to $377 million annually.
Earlier this month, City Manager Peter Wallace also warned councillors that the current budget model, which depends partly on borrowing from reserves and one-time infusions of cash, cannot be sustained. He told councillors the city needs to find new sources of revenue and couple that with dramatic cost cutbacks.