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Toronto: Mayor John Tory says he will push for the introduction of a property tax levy to help pay for the construction of badly needed transit and housing in the city.
The levy would be phased in over a five year period beginning in 2017 and would include annual increases of 0.5 per cent for a total hike of 2.5 per cent by 2021.
According to Tory, the expected revenue from the increase would be $13 million in its first year before growing to about $65 million annually once fully phased in.
he increase is being proposed on top of a 1.65 per cent property tax levy that is being used to pay for the Scarborough subway extension and will remain in effect for 30 years upon being fully phased in in 2017.
“I believe I am doing exactly what people expected me to do, which is to be responsible about keeping taxes low while also getting things done,” Tory told reporters shortly after announcing the levy during his annual state of the city address. “I think people are fed up with the fact that they keep seeing announcement after announcement out of city hall and the projects never happen and that is for one simple reason: there is no money set aside to pay for them. We are beginning that process today.”
Fund would help address funding gap for already approved projects
Tory’s announcement that he will push for the establishment of a dedicated property tax levy for transit and housing comes one day after City Manager Peter Wallace warned the executive committee that the city has no way to pay for an estimated $23 billion in capital projects already approved by council.
Speaking with reporters at the Economic Club of Canada, Tory said he believes the levy would be a “sensible, honest and transparent” way to build infrastructure, though he also admitted that it won’t “solve the problem” of crumbling social housing and insufficient public transit.
“We cannot go on the way we have been going on, not building transit, not addressing the housing issues and approving projects with no funding,” Tory said. “I think that is a fraud committed on the taxpayers and I think it has been engaged in for decades and I am going to stop it.”
The proposed property tax levy would bring in about the same amount of revenue as the $60 vehicle registration tax that was killed by then-mayor Rob Ford’s administration in 2011.
Tory, however, pointed out that this levy would go into a dedicated fund unlike the vehicle registration tax which went into the city’s general coffers.
“People will know it is not getting mixed up in a black hole,” he said.
Perks says levy doesn’t fully address problems
Tory had previously maintained that he would keep property tax increases to around the rate of inflation and his comments on Monday represent the first indication that he may be willing to implement tax hikes above and beyond that as a way to address the city’s infrastructure needs.
In a series of messages posted to Twitter on Wednesday afternoon, Coun. Gord Perks said it is a “big deal” for Tory to “put his toe in the tax water” but he added that the city’s problems “require big moves not little ones.”
“We still have two conversations to have. A) Which do people want, fewer services or higher taxes? There is no third option. And B) when will we join other large world cities and use a full suite of revenue tools?” Perks asked.
The property tax hike will result in the average homeowner’s bill going up by $13 for five successive years, if approved by council.
When added together with the Scarborough subway levy the two increases will eventually cost taxpayers an extra $104 a year once both have been fully phased in.
