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Is Ontario a ‘real funding partner’ for Toronto’s relief line?

The Yonge Relief Line may have a new alignment — and that decision couldn’t come soon enough. This alignment is one of the few remaining steps that need approval before city staff can push this much-needed project forward.

And this project NEEDS to move forward.

The relief line has been talked about on and off for the last decade, and yet, it is still nowhere near completion. Politics always got in the way. Since then, the original Yonge line (Line 1) has become more crowded. This has made commutes nearly unbearable during peak hours. It has effected ridership and forced more people to use their cars instead of taking public transportation.

While some question the need for a relief line, especially with SmartTrack on the table, city staff, the Toronto Transit Commission, and Metrolinx have all come together to label the relief line as a priority for Toronto’s new transit network. Without it, they say, congestion on the Yonge Line will not be alleviated.

The biggest problem with the relief line will be the funding. As Toronto Mayor John Tory said repeatedly at a series of press conferences on transit last week, without serious funding from provincial and federal partners, Toronto will be unable to grow its transit network.

The Ontario government promised in 2016 to provide $150 million in funds to the planning and design of the relief line. That number has not changed, despite the current cost projection of $6.8 billion for the relief line. This means that the provincial contribution won’t do anything other then fund a study or two.

It’s also why Tory has been campaigning and pushing the province for more. When the province dismissed Toronto’s attempt at raising funds through tolls, they effectively removed a significant form of revenue for the city. Without that money, Toronto has no choice but to make its residents pay for the transit network, no matter what the politicians say. That’s why Tory is asking the province to step up and become a “real partner” in their efforts to fund transit infrastructure. He wants the province and the federal government to each pay 40 per cent of the relief line.

The province has been hitting back, indicating they are a “stable provincial funding partner”, despite the lack of funding announcements. But Toronto residents are not falling for it — and that fact is already showing in the polls.

Taking away a revenue-generating tool like tolls without offering a solution is not leadership. Ignoring the needs of one of the biggest cities in the province is also not the way to get elected, despite what advisors may be whispering into the Premier’s ears. The Liberal government will find that out if they refuse Tory’s proposal of short-term hotel taxes as a revenue tool.

Back to the relief line: In May, the executive committee will debate the new alignment option down Carlaw Ave., between Gerrard St. and Eastern Ave., before sending the route to city council for approval.

At this moment, construction will begin in 2025.

What’s the deal with Toronto’s revenue tools?

The City of Toronto is facing a budgeting crisis with over $91 million worth of funds to find by City Council. Several revenue tools were presented by city manager, Peter Wallace in an effort to find money to fill the gaps and pay for all of the projects that are much-needed in Toronto.

Terms like ‘property tax’, ‘municipal land transfer tax’, ‘parking levy’, and ‘expressway tolls’ , are being thrown around like crazy, and it is easy to get lost in the world of financial terms. Understanding the inner-workings of the various revenue tools is the best way to decide which financial tools should be adopted by the city and which of them should be discarded. That’s why Women’s Post has created this guide, to help our readers understand the ins and outs of the revenue tools presented in the executive committee, and what terms will be flying around next week at city council.

Property Tax

Property tax is a commonly used revenue tool and is most often brought up in city council. A property tax is a levy on a property the owner is required to pay. It is set by the governing authority of any given area, which in this case is the municipality of Toronto. Property taxes in Toronto are a hotly contested issue because Toronto property tax rates are the only metropolitan tax that is lower than the surrounding area, the GTHA, and politicians don’t want to raise them. The city has proposed a two per cent property tax hike, but Toronto Mayor John Tory vows to raise the property tax no higher than half a per cent. Instead he is pushing for alternatives instead of pushing more tax on property owners.

Municipal Land Transfer Tax

Municipal land transfer tax has been a popular option for Toronto in the last year and helped keep the property tax inflation rate at bay in last year’s budget. The municipal land transfer tax is a fee that is paid by the person who purchases the home to the municipality that is charging it. There are rebates for first-time home buyers and other jurisdictions, such as Vancouver, have imposed a foreign land transfer tax to help lower inflation in the real estate market. It is a useful tool, but was used in the 2016 budget so may not be a viable option when looking at other options for 2017. City Council will discuss harmonizing the Ontario land transfer tax with the municipal option, which would require legislative changes but would streamline the process in the long-run.

Personal Vehicle Tax

The personal vehicle tax has been a revenue tool that was presented in the past before at City Council and was not a popular option. Council will consider the re-introduction to tax $120 per vehicle annually, but Tory has stated he is not a big fan of this option. The rejection of the personal vehicle tax has angered environmental groups who want to see people choosing to drive vehicles in the city pay extra taxes. The personal vehicle tax is also an easy and quick tax to implement because it doesn’t require any extra infrastructure.

Hotel Tax

The hotel tax revenue tool is being hotly contested by the tourism and hotel industry, which has already seen slowed growth due to the increasing popularity of air bnbs and other short-term stays. By placing an extra tax on the hotel industry, it may put more pressure on hotels to pay when they can’t afford to do so. Tory rebutted in the executive committee though that the annual subsidy supplied to hotels would help pay for the hotel tax if it were approved. This revenue tool would require provincial legislative and regulatory reforms, and is not a popular option in regards to fairness, efficiency, and is low in revenue quality according to Wallace’s presentation.

Expressway Tolls

Expressway tolls are the newest revenue tool to be introduced by Mayor Tory and is a popular option. The expressway tolls would require vehicles to pay a fee when they use the Don Valley Parkway and the Gardiner Expressway. If the city charged $2 per trip, the annual revenue would be $166 million per year. The start-up cost to build the expressway tolls would be an estimated $100-$150 million and have ongoing operational costs of $50 to $60 million. The expressway tolls would require provincial legislative changes, but could be implemented in the 2017 budget. City Council will be focusing heavily on tolls next week.

There are many other revenue tools that were presented including an alcohol beverage tax, a parking levy, a third party sign tax, graduated residential property taxes, and a municipal sales tax. From the climate of the executive committee meeting, it would be surprising to see any of these options be approved. They have not been given the same amount of attention as the hotel tax and expressway tolls. A graduated residential property tax and a municipal sales tax in particular require provincial legislation changes and were listed by Wallace as aspirational changes to be further discussed in 2018.

In order to fully grasp the many revenue tool terms that will fly around at City Council next week, focus on the most important options that are available. Also remember to bring popcorn. Even though discussing financial tools can be a bit of a bore, City Council is sure to get lively when discussing the various revenue tools that were presented for debate.