City Council debates new revenue tools

It should have been a simple discussion. Toronto City Councillors were asked to debate the validity of looking at implementing new revenue tools as a means to generate dedicated funding toward the expansion of Toronto’s transit system. However, councillors took the long road there. A three-day debate that required multiple votes is what ensued.

Let us be clear. Councillors were not debating whether or not to implement new taxes, or specific taxes, or what exactly would be built using this newly generated revenue. This debate was to settle a matter as to whether or not examining the use of transit tools would be advisable going forward. In the interest of democracy and public discourse this should have been a short debate. But the lack of leadership from Mayor Rob Ford (who did not attend the entire duration of the debate) and his inner circle took the debate in a direction that could only be described as school yard antics. However, it should be acknowledged that the lowest point of the marathon debate came from outside the Mayor’s circle when Adam Vaughan, Councillor for Ward 20 (Trinity-Spadina), put forward a childish motion proposing a new tax on vinyl labels to personally attack the Ford’s private business Deco Labels and Tags.

Childishness aside, this debate comes down one fact: Torontonians want subways. A longstanding refrain from the Mayor, his promises of new subways during the previous municipal general election has yet to be realized. Councillors from across the political spectrum must come around to the understanding that transit expansion requires funding.

Central to the debate was the rhetoric of ‘revenue tools’. The Mayor’s inner circle felt this was a misleading statement. To be fair, they are correct. These are taxes. That word has a tendency to scare some. But this is a discussion of either-or. Either the City accepts new methods of taxation or it sits on the status quo: the best transportation system 1980 can buy.

There are a number of options to fund the expansion of the subway system of which the City is in desperate need. However, I want to delve into the option that I believe is most appropriate. That would be the proposal of Sarah Thomson, publisher of Women’s Post and Chair of the Toronto Transit Authority, that Toronto implement a 1% regional sales tax. For what it is worth, Councillor Vaughan put forward his own motion that outlined the implementation of a similar province-wide sales tax of 1%.

Small regional sales taxes are widely used to fund regional transportation plans. For example, Seattle, Phoenix, San Diego, Los Angeles County and Denver have dedicated regional sales taxes. Many of these taxes were brought in by ballot referenda that clearly communicated the funds would be dedicated to build transit, including majority public support for these measures. Recent polling demonstrates there is public support in the GTA. A referendum in conjunction with the 2014 general election could settle this matter once and for all.

Transit-dedicated sales taxes in many United States cities of note had significant negative impact on local retail. Given that the 2008 GST reduction dropped total sales tax levels in the Greater Toronto-Hamilton Region, there is certainly room for an increase of as little as 1%. Such a low rate minimizes the impact on retailers and consumers.

When voting on the matter was decided, Councillor Vaughan’s motion was amended to include the following:

  • “That City Council support the extension of the Bloor Danforth Subway Line from Kennedy Station to the Scarborough Town Centre and north to Sheppard Avenue.” (Proposed by Councillor Glenn De Baermaeker, Ward 36 – Scarborough Centre.)
  • “That City Council request that the North York Relief Line (unfinished subway construction between Sheppard Avenue and Allen Road, and Yonge Street and Sheppard Avenue) be recognized as substantive project priority for Phase 2 Metrolinx funding. (Proposed by Councillor James Pasternak, Ward 10 – York Centre.)

It should be noted, however, that City Council quickly chose to not support the 1% sales tax on the very next vote on a motion by Josh Colle, Councillor for Ward 15 (Eglinton-Lawrence). That motion carried to reject seven different revenue tools, including a sales tax.

At the end of the day, this council dropped the proverbial ball. Torontonians have been waiting far too long for the transit system we so desperately need and deserve. For the time being it appears we will continue to wait.

Toronto Transit Alliance host symposium on the Big Move

Think big. That was the message being put forward by the Toronto Transit Alliance (TTA), their panel of guests and a room full of self-professed transit geeks. On the panel were Bruce McQuaig, President and Chief Executive Officer of Metrolinx, Richard Joy of the Toronto Board of Trade, Mitsy Hunter of Civic Action and Cherise Borda of the Pembina Institute. The Big Move is a transportation plan for the Greater Toronto-Hamilton Area (GTHA) being put forward by the provincial government agency Metrolinx. At 25 years and $50 billion, the Big Move is the first plan of its kind. The potential is here to have a drastically positive impact on the GTHA. Everything from community connection to employment could be impacted. There is only one problem: How are we going to pay for it?

Sarah Thomson, Chair of the TTA and Publisher of Women’s Post, has been adamant about pushing for a 1% regional sales tax. Such a method would get those living and working in the region to share in the cost while raising more than $800 million per year toward municipal revenue. Is this the answer? Possibly.

There are a number of other tools that cannot be discounted. A recent report from Metrolinx advised the region look at a number of option revenue options; chief among them connecting expansion to property tax and tolling roads.

Whatever revenue tool the region chooses to utilize, this is an issue that needs to be resolved. As things stand currently, the region is losing $6 billion annually to gridlock. That number is only expecting to balloon to $15 billion by 2031. But Richard Joy made it clear that we have an opportunity if an early provincial election is called. He is calling on Ontarians to make this the ‘transportation election.’ Put transportation on the map during the coming election cycle. Transportation consistently ranks among health and education as the most important issues to Ontarians. It is time we responded to it as such by calling on the government to create a dedicated stream of funding specific to transportation.

One thing is certain: if governments and citizens do not address this now, the issue will get away from them. Transportation has already become a generational issue. If we act now we can make sure the next generation is not saying the same thing to us. So, as Thomson said to close the symposium, “Tell everyone you know about the need for revenue tools.”


For more information on the TTA’s proposals to ‘unlock gridlock,’ take a look at their website and follow them on Twitter at @TransitAlly and #UnlockGridlock.