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Toronto 2017 budget continues to rely heavily on property owners

The executive committee pushed forward the proposed 2017 $10.5 billion budget on Tuesday, and leaves many in Toronto divided on how satisfied they are with the results.

Here are the highlights:

The budget includes a two per cent increase in residential property taxes, will allocate $80 million more to TTC, and $37 million to  Toronto Community Housing. The city will also be providing 200 more shelter beds this year and Mayor John Tory has thrown his support behind supporting more daycare subsidy spots — there are currently 18,000 children on the daycare subsidy waitlist— though provincial aid is needed to help foot the bill.  Unfortunately, recreation fees will still be increasing.

Other revenue tools that have been approved include a hotel tax of four per cent (10 per cent for short-term rentals) that is expected to bring in an extra $5.5 million in revenue. There is also a plan to harmonize the Ontario Land Transfer Tax with the Municipal Land Transfer Tax, which is estimated to raise $77 million.

The city will have to use $87.8 million from reserves to make up the rest of the budget.

The property tax hike, hotel, and municipal land-transfer tax were met with criticism by many Toronto citizens because these revenue tools put even more pressure on locals to meet the budget needs of the city. Relying so heavily on the inflated housing market is also an unstable revenue measure because if the housing bubble pops, the municipal land transfer tax and property tax rates could financially destroy homeowners.

Instead of consistently relying on property owners to pay for Toronto’s services year after year, more creative revenue tools need to be adopted in future city budgets. Road tolls, recently shot down by Premier Kathleen Wynne and the Ontario Liberals, is a solution that would directly fund transit by charging not only the 905 commuters coming into the city for work every day, but all Torontonian downtown drivers a small fee. Using road tolls as a revenue tool would relieve pressure on property tax hikes and raise much needed funds for transit and community housing that desperately need to be built.

The budget fills gaps on some city services, but falls short of adequately shortening the affordable housing waitlist, not to mention many other items on the agenda that desperately need funding.

Ontario will still have a revenue problem

I became a Liberal advocate in 2011 because they were the only party honest enough to admit that both Ontario and Toronto have huge revenue problems. Services like healthcare and education suck up all the tax dollars collected by the province and, as our population grows, there is an even greater need for more funding options. Few politicians have the guts to stand up for increasing taxes or implementing tolls because they risk their chances of re-election. But Toronto Mayor John Tory did. He stood up for tolls despite the risk of losing support in the suburbs because he, like many of us, understands that dedicated funding for transit has to come from somewhere.

I met Kathleen Wynne and others in the Liberal party who said they were willing to admit that Ontario didn’t collect enough revenue to pay for the services residents want — services like transit and housing that cities desperately need. I became a Liberal because of these facts. I believed the Premier would stand up and do the right thing, and not cave to low-polling numbers or pressure from cabinet members desperate to get re-elected. She once believed that tolls were a necessary tool to get the dedicated transit funding Toronto needs.

Tolls on Toronto highways are just as important as tolls on provincially-owned highways. Not allowing Toronto to access this funding tool will simply push the cost of transit expansion and other services on to future generations. From health care, to education, to efficient transit, we don’t have enough funding to pay for everything. But today, Premier Wynne has decided to ignore that problem and gamble that economic growth and low gas prices will last forever.

Relying on our current gas taxes for the billions of dollars needed over the next decade for transit expansion in Toronto is the same “do nothing” approach that has caused the growth of gridlock in the city. Gridlock is costing residents over $13 billion per year in time and lost revenues. A slight slip in economic growth, or increase in gas prices will lower the amount of revenue Ontario collects, meaning we’ll be financing all this transit expansion through debt.

So, why would Premier Wynne go against everything she stood for? Rumours of internal “poli-tricking” swirl with cabinet ministers outside Toronto apparently demanding she stop her support of Mayor Tory’s plan. The Premier should remember how flip flopping on the gas plant in Mississauga almost cost Liberals the 2011 election and this huge change in her position on Toronto tolls may very well lose her the liberal base of support in 2018. This kind of internal poli-tricking is why voters lose faith in politicians, and will choose an honest buffoon over a smart, intelligent, candidate.

Today I am ashamed.

City council votes to support tolls

“You rarely have to ask permission to do the right thing.”

This quote comes from an open letter released Tuesday morning, with the signature of five different Canadian mayors attached to it. The letter calls for more municipal power to create city revenue, so that municipal leaders can match infrastructure funding provided by the provincial and federal governments.

In essence, Canada’s biggest cities, including Toronto, were asking for the power to do their part to expand and grow.

This sentiment was much needed prior to the city council meeting Tuesday, where councillors discussed how they would be paying for city services for the foreseeable future.

After much debate, city council approved staff recommendations by staff to generate revenue by using various taxes and tolls. The implementation of tolls is a brave new step for the city – proof that politicians understand the need to create revenue and alleviate congestion on city roads.

Toronto Mayor John Tory proposed the use of tolls on the Don Valley Parkway and the Gardiner Express over a month ago, and since then it has received a mostly positive response. The money would be directly funnelled into maintaining and funding transit-related projects, which works to both alleviate congestion on roadways and expand Toronto’s transit network.

City council ultimately voted in support of the mayor’s proposal. Nine councillors opposed the motion.

These tolls, which could be implemented as early as 2020, would affectively alleviate congestion, unlock gridlock, and help pay for the much-needed transit network being built throughout Toronto. A win-win scenario.

Council also agreed to look into a 0.5 per cent levy on property taxes, a four per cent tax on hotels, up to a 10 per cent tax on short-term rentals like Airbnb, and harmonizing and/or increasing land transfer taxes. The city will also be asking the province for a share of the harmonized sales tax.

The debate on tolls will continue in the new year, when city staff will present options for implementation, including cost.

City Manager Peter Wallace made it clear in his presentation on the city budget that council had to approve of some of the proposed revenue tools — if they didn’t, they should be prepared to provide solutions to the $33 billion in unfunded projects the city is undergoing.

“I think it comes down to what level of public service does city council want to endorse,” Wallace said bluntly. He also made it clear that by voting to take tolls to the next level, council can rest assured that city staff will proved thoughtfully.

Other councillors were not so thoughtful. Many ignored the fact that people pay for the use of public transportation and that user fees are popularly used in large cities. However, at the end of the day, even the wary councillors understood the need to make a firm decision or risk being left with a large revenue gap to fill.

And to that brave majority, Toronto thanks you.

Executive Committee gets a toll awakening

Toronto’s city councillors got a rude awakening at Thursday’s lengthy Executive Committee meeting. City staff gave a presentation on revenue tolls, saying that it is necessary that council approve at least a few of their reforms — increase property taxes, sales taxes, vehicle tax, or user fees like tolls and public transportation fares. If they didn’t, well, they would have to find more cuts.

Toronto currently has $33 billion worth of unfunded projects. As city manager Peter Wallace said during his presentation, if executive council or city council decides not to approve the use of tolls or increase property taxes, then they better be ready to propose reductions in the capital spending.

“Toronto, a $12 billion enterprise, does require a long term, vigorous, and consistent framework,” he said. “Cutting costs on an annual basis doesn’t work long-term. Toronto needs a long-term investment and revenue strategy.”

Wallace spoke candidly about the need to choose, and implement, a revenue plan. If city council is not willing to increase taxes, then tolls are the only option.

Mayor John Tory announced last week that he would be supporting the implementation of tolls as a source of revenue for infrastructure and transit-related projects. His proposal: a $2 flat-rate toll on the Don Valley Parkway and the Gardiner Expressway. With this toll, the city would accumulate approximately $166 million in extra revenue. If the rate were to increase to $3.90, comparable to the cost of a transit fare, the city would make $272 million.

“If you want to live in a city in five or 10 years that is so much worse for congestion, then we shouldn’t have this discussion,” Tory said at a press conference prior to the vote. “But I’m not prepared to be that kind of mayor and when most people think about it, they know we need to build the transit and they know it isn’t free.”

“If anyone is opposed to road tolls, they have an obligation to tell us what they would do instead.”

There seemed to be a lot of differing opinions, but at the end of the day, the executive council saw the light and voted to send the toll proposal to city council for further consideration. The fees/cost of toll implementation will be decided at that point. Executive Committee also voted to ask the province for permission to impose a hotel and short-term accommodation rental tax and an alcohol tax. Council is still adamant not to increase property taxes by more than half a percent.

Tolling Toronto’s major roadways has a lot of benefits, and as was proven by the Mainstreet Research poll conducted last week, most of Toronto’s residents are comfortable paying a fee to use the DVP and Gardiner. The hope is that tolls will not only collect the much-needed revenue to build more transit, but it will also alleviate congestion and gridlock by encouraging car pooling and transit usage.

At the same time, the revenue tool discussion is always a hard one to have. An election is forthcoming, and no city councillor, not to mention mayoral candidate, wants to be the person to say “hey, we are raising taxes and we are making you pay to drive to work.” Toronto’s current mayor seems to have put the politics of re-election aside and was brave enough to push forward a proposal that may not be all that popular among his fellow councillors. And for that, Women’s Post commends him.

All I can say is that I hope the rest of council realizes that Toronto is in a pickle. The city needs money and it needs to build transit and infrastructure. The reality is that you can’t do one without the other.

New Mainstreet Research poll shows Toronto crazy for tolls

There has been a lot of criticism following Toronto Mayor John Tory’s new proposal to toll the Gardiner Expressway and the Don Valley Parkway. But, what do Torontonians really think? A recent poll published by the Transit Alliance, a non-political organization that works with people in the transit and infrastructure industry, shows that over 50 per cent of Toronto residents actually support the use of tolls.

The poll, which was conducted by Mainstreet Research on Nov. 25, surveyed residents from all 44 wards in Toronto to find out if they supported tolling major roadways to pay for infrastructure and transit. What they found was an overwhelming endorsement of the mayor’s proposal. Sixty-five per cent of Toronto respondents said that tolls were the preferred source of revenue compared to increasing property taxes or introducing a sales tax.

This statistic was further broken down into regions: 72 per cent in the downtown core, 64 per cent in North York, 62 per cent in Scarborough, and 57 per cent in Etobicoke.

When asked specifically about tolls, respondents across the board said they would be supportive of implementing them on the DVP and Gardiner.

The question was: “Proponents of road tolls for the Don Valley Parkway and the Gardiner Expressway say road tolls would force non-city of Toronto residents to pay their fare share; critics say road tolls are an unnecessary tax hike. Do you approve or disapprove of introducing tolls on the DVP and Gardiner Expressway to pay for transit and infrastructure?

Support for tolls was the highest among downtown residents, with 70 per cent of respondents approving — including 52 per cent strongly approving — of the revenue sources. Residents of Etobicoke and Scarborough were less supportive of tolling, at 61 per cent and 68 per cent support respectively — still relatively high within the margins.

Only a third of Toronto residents approved the use of property tax increases, and even less supported the use of a sales tax (22 per cent).

While there are a number of critics that believe tolling to be an unfair tax on those living within the 905 region, this poll shows that even those living in Etobicoke understand the need to create revenue for better transit and infrastructure. The city needs to grow, and if the choices are between an increase in taxes or a toll on drivers, Toronto has made it clear that tolls are preferable.

If there is this much support throughout all the wards within the city, hopefully the mayor’s proposal will soar through council and Toronto can finally start to accumulate the funds it needs to continue developing transit and infrastructure throughout the GTHA.

Mainstreet Research surveyed a random sample of 2,280 Toronto residents, calling a mixture of landlines and cell phones. The poll has a margin of error of +/- 2.05 per cent.

Mayor John Tory right on the money with revenue tools

Toronto Mayor John Tory announced Thursday that he would be proposing the use of tolls and a hotel tax to create extra revenue for transit and infrastructure projects in the city. Prior to that announcement, a report was released by the Munk School at the University of Toronto indicating the need for a multi-tax system to pay for services. The conclusions of the report back up Tory’s decision to actively search for more revenue tools to help pay for the much-needed transit system being built in the city.

The report was written by Harry Kitchen, a professor in the economics department at Trent, and Enid Slack, director of the Institute on Municipal Finance and Governance and a professor at the Munk School of Global Affairs. They argue that property taxes, user fees, and transfers from other levels of governments have remained unchanged as large cities continue to grow and expand. This is unsustainable and larger cities in Canada must adapt.

The authors’ argue that decisions on public spending need to be linked with revenue decisions. This is what the mayor was trying to say in his speech on Thursday — that Toronto can’t afford to keep building and providing better service unless there is a way to pay for this growth.

The report also makes mention of services that benefit people across municipal boundaries like roads. While the report suggests transfer of responsibility to the province, sometimes that isn’t possible. Tolls, for example, would be a good compromise, allowing people who often travel into the city on a daily basis to contribute in a way besides property taxes.

In terms of the property tax, something Mayor Tory refuses to increase by more than half a per cent, the authors’ say it’s a good way to raise revenue for infrastructure, but that a mix of taxes is recommended. Property tax is also more expensive to administer compared to income or sales tax. “The property tax is relatively inelastic (it does not grow automatically as the economy grows), highly visible, and politically contentious,” the report reads. “It may therefore be insufficient to fund the complex and increasing demands on local governments.”

“A mix of taxes would give cities more flexibility to respond to local conditions such as changes in the economy, evolving demographics and expenditure needs, changes in the political climate, and other factors.”

The report suggests charging user fees for services as often as possible, as under-pricing can result in over-consumption. Tolls were specifically mentioned as an example of a user fee that can be used on a major highway or arterial road running into a big city. While high-occupancy tolls, which charges vehicles for using a specific lane, can be effective on big highways, it’s much more efficient to toll the entire roadway.

Revenue collected from the tolls in place on the 407 in 2011 earned the provincial government an extra $675 million. The proposal set forth by Tory indicated an extra $200 million in revenues with a $2 toll charge on the Gardiner Expressway and the Don Valley Parkway. The other benefit is that it will reduce congestion and unlock gridlock while creating funds that can be dedicated for transit.

Other options presented in the report include a parking charge, an increase in personal income and sales tax, a fuel tax, hotel tax, and vehicle registration fee. The conclusion seems to be by increasing/implementing a number of these revenue tools, it won’t affect a singular demographic to harshly while still generating funding for a large Canadian city to grow.

It looks like our mayor was right on the money, so to speak.

Mayor John Tory proposes tolls for DVP and Gardiner

The city of Toronto has finally clued in — if you want change, you need to be willing to make the unpopular decision to pay for it. As the mayor said in a speech Thursday afternoon, “If we are to achieve those goals we have to acknowledge that things we need, from transit to affordable housing, are not free. Pretending otherwise is not responsible and it’s not fair to the people of Toronto.”

Mayor John Tory chose to announce a new proposal to find much-needed revenue to help pay for the new transit network being built in the city at a luncheon at the Toronto Region Board of Trade Thursday afternoon.

What was this exciting solution? It was tolls.

Tory is proposing a $2 single-use toll to use the Don Valley Parkway and the Gardiner Expressway. This will bring in an approximate $200 million of extra revenue that can be used specifically for infrastructure. This would be a tax on everyone, whether or not they live in the city or not. This will ensure that those who work in the city also contribute to its growth.

“People say that Toronto’s population is approximately 2.8 million. That’s true, at night, when the people who live here are home sleeping,” said Tory. “But by day, the number of people in this city goes up dramatically with all the people who come to work or to visit, all the while using the services paid for by Toronto taxpayers.”

The details of the proposal are still unknown. It will be presented to executive committee next week along with all the other options for revenue tools. The city has to find about $33 billion over the next 20 years to fund capital projects, despite provincial and federal aide.

Mayor Tory has said he will not be considering vehicle registration tax or a parking levy. Two other forms of revenue were proposed during the speech, including a half per cent levy on property taxes and a mandatory hotel tax at all Toronto hotels and short-term rentals like Airbnb.

During a press conference following the speech, the mayor said that doing nothing is not an option. The $2 cost, as well as the functionality of the tolls, will be up for discussion at city council in the upcoming months. Assuming city council sees the value of tolls, Tory hopes to see it implemented as of 2019.

TTC hikes fares by 10 cents, needs investment from city

Last night, the TTC board approved a 10-cent fare increase for tokens, reducing their shortfall for next year’s budget to about $61 million. As Toronto Transit Commission CEO, Andy Byford, emphasized during his presentation, the board had very few choices. A fare increase was an inevitable and unfortunate necessity.

Cash fares will remain the same, but the cost of a token or a PRESTO single ride will increase to $3. A monthly Metropass will go up to $146.25 for adults and $116.75 for post-secondary students. Cash and ticket prices for seniors and students will also increase by 10 cents.

The change will be effective as of January 2017, although the board did pass a second motion saying they will recommend freezing fares in 2018.

The TTC will now have to turn the budget over to the city budget committee, who will then decide whether to approve the budget with the 2017 shortfall. The fare increase will result in an extra $27 million for the transit agency. That, in combination with a number of efficiency cuts, has already lowered the shortfall from $230 million to $61 million. By approving the budget Monday, the TTC board is saying there is no other way to cut the budget. They have done everything they can without increasing fares by an even more substantial amount or without cutting services.

The TTC receives a very small subsidy compared to other North American cities — 90 cents per rider. Vancouver’s subsidy is $1.89 per rider and Calgary is $1.69. York Region, whose transit network is much smaller, has a subsidy of $4.56. Without more funding, there is absolutely nothing the TTC can do but increase fares.

As much as city council is against raising property taxes, it was clear that concerned transit users are fine with it. Most wanted all residents to contribute, whether it was through tolls or property tax, so that seniors and low-income families don’t have to walk across the city to get to work because they can’t afford public transportation. Raising property taxes was actually a suggestion given to the board by a Toronto resident.

Byford has done all he can do in terms of finding efficiencies, cutting the budget by another 2.6 per cent for the second year in a row. During a time where the TTC is working with the city to build more transit and improve service, this is not a time for cuts.

Now, it’s the city’s turn to take this budget and commit to investing in public transportation. Residents have said they are willing to contribute through taxes, and there are other forms of revenue such as tolls that can be used to help decrease the shortfall, so let’s run with it! It’s time to seriously invest in transportation, especially if Toronto has any hope of completing our integrated transit network.

City council approves transit network plan

As a reporter, I love covering City Hall. But, sometimes it can get frustrating — for example, when it takes nine hours of discussion before a decision can be made surrounding a transit plan that has been on the table for over a year.

City Council voted Tuesday to go forward with the “motherlode” Transit Network Plan and approve a deal made with the province that will see them contribute approximately $11 billion towards transit. This includes $3.7 billion for Regional Express Rail (RER) and $7.84 billion for Light Rail Transit (LRT).

The problem? The city was not prepared to carry their weight of SmartTrack. This agreement would see the city contribute $3 billion of their own funding towards the project (or $2 billion if the federal government pitches in). Toronto will also be responsible for day-to-day-operations and maintenance of the Finch West, Sheppard East, and Eglinton Crosstown LRTs.

Mayor John Tory had to remind council a number of times that the deal with the province really does benefit the city, saying that if the province had meant to pay for everything, they would have had a parade and used it as an election campaign issue.

“The number one thing they want me to do is ease the strangulation that has taken place in this city as a result of traffic congestion and the number one way you can do that is build public transportation,” Tory said to reporters half way through the meeting.

This transit network has been a continuous source of political capital for city councillors, which is why staff divided the funding discussion into two parts in hopes of making the decision easier. During this particular council meeting, councillors were simply voting to approve the negotiations between the province and the city, and committing the city to continue their work. Staff will then return with the exact costs and details of construction for each project.

The second discussion will be about revenue tools — how exactly will Toronto pay for transit? Will they have to raise property taxes? Will they have to find cuts somewhere in the budget? This discussion will happen in December or January and is sure to be just as lengthy, if not more so.

However, this did not stop a number of councillors from using this time to try and amend the motion to squeeze as much as possible out of the province. Staff warned that by delaying the provincial negotiations, it could result in the province completely reneging on the agreement. As City Manager David Wallace pointed out, Toronto needs to make an investment and they need to do it now.

There were a number of councillors who were concerned about making that investment, saying that approving a plan before knowing how the city was going to pay for it was irresponsible. While I can admire their tenacity and commitment to the budget, city staff, as well as the Toronto Transit Commission, have reached an agreement that appears to be quite fair. By continuing to delay the building and construction of necessary transit systems, council will ultimately ruin all the hard work city staff have put into building an integrated transit network to begin with.

The solution seems simple: instead of complaining, be creative and start to come up with ways of creating revenue without raising property taxes to the extreme. I’ve previously suggested the use of tolls, something I firmly believe would help raise the much-needed revenue for transit. Not only would it unlock gridlock on our congested roads, but the money could be earmarked for SmartTrack specifically!

Toronto NEEDS transit, and if at all possible, it would be great if part of it was finished in my lifetime. Let’s stop the bickering and start to think of real solutions to the city’s gridlock problems.

Transit: It’s all about politics

“Let them do their work,” pleaded Toronto Mayor John Tory early Tuesday morning when City Council first sat down to discuss budgets and transit.

And thankfully, most of those councillors listened.

At Wednesday’s meeting, city council voted to approve the transit network plan as proposed by staff — including the controversial single-stop express subway in Scarborough.

A few amendments were tacked on to the motion, including a promise to study alignments and associated costs of the corridor. Staff will also be looking at a Sheppard subway extension and the extension of the Bloor-Danforth line from Kipling Station to Sherway Gardens.

But even with these unexpected add-ons, the approval of the transit network plan is a win for both the mayor and the golden horseshoe area.

“Following this vote we must now put an end to years of inaction and delay and move ahead with a comprehensive plan to serve our city’s needs.” Mayor Tory said in a statement

And there’s the rub. Despite the positive results of the city council meeting, progress was nearly delayed because a handful of councillors were pretending to be transit experts in their attempt to garner media attention.

In every municipal government, there are elected officials — who often have a variety of skills, including some experience in management, customer service, and politics— and then there are city staff, who are hired based on their particular expertise.

This week’s city council transit kerfuffle is indicative of a lifelong politicians working the issue for media attention to gain recognition for the next election. A handful of councillors ignored recommendations provided by Toronto Chief Planner Jennifer Keesmaat (who has a Master’s in Environment and Planning), City Manager Peter Wallace (who served as the provincial Deputy Minister of Finance and Secretary to the Treasury Board), and Toronto Transit Commission CEO Andy Byford (with over 15 years of Transit operations), among others.

There are certain city councilors who have been pushing their own transit agendas, ignoring the sound advice from staff. Councilor’s like Josh Matlow have gone as far as recommending council revert to the original transit plan proposed before former Mayor Rob Ford was elected  — citing high costs and new polls that indicate residents want an LRT instead.

Matlow (whose extremely thin resume has school board trustee, and co-director of an environmental non-profit) put forward a motion to return to the 24-stop LRT plan, saying that someone needs to think about the taxpayers and how best to invest funds.

Other councillors used the opportunity to try and promote projects for their voters, like the Sheppard subway extension. Councillor Giorgio Mammoliti even suggested diverting funds from the Finch LRT — which is already in its procurement stage — to fund the Scarborough subway.

The problem? Consistently changing plans costs tax payers a fortune and would have resulted in a two-year delay, leading up to another election in which a new council may have different ideas.  Essentially, Toronto would be forced to start from scratch. “It would be problematic to pull apart this optimized network,” Toronto Chief Planner Jennifer Keesmaat reminded council.

At the end of the day, the experts were able to argue their case and explain the high-costs and the severe consequences of changing the transit plan yet again.  If there is one thing that should be taken away from Wednesday’s exchange, it’s that there are a few councillors focused on only one thing: re-election. Councillors are pretending to be more knowledgeable than the experts because it makes them look good to their constituents.

City staff work year after year trying to hold together a broad transit plan they understand that Toronto needs to start building now or else it will take another 50 years before residents see any relief on the Yonge Line.

The experts did their job — now it’s time for council to just sit back and listen.