Should Toronto tax parking? Transit advocacy group wants new levy to help pay for TTC

The City of Toronto is leaving hundreds of millions of dollars in needed tax revenue on the table each year because it hasn’t imposed a tax on parking, a transit advocacy group says.

TTCRiders says had Toronto implemented the commercial parking levy after it was first examined in 2016, the city could have raised as much as $2.8 billion. And the group says it wants city council to take another look at the tax as they work on the 2023 budget, which will cut TTC services. 

“This is a potentially transformative tool that could generate hundreds of millions of dollars every year for climate and public transit,” said TTCRiders director Shelagh Pizey-Allen.

“It’s a parking levy on big malls and commercial lots. And it has been talked about, but staff have never studied how can we implement it here in Toronto?” 

The group is set to announce a renewed push to have city staff examine the tax Monday morning.

It comes ahead of city council’s potential approval of TTC’s operating budget for 2023, which includes fare hikes and service cuts set to come into effect this spring. 

Last year, the commission was set to provide 180,200 total hours of service. With this new plan, the number of total hours served will fall to 164,200, representing a roughly nine per cent decrease across the board. 

Pizey-Allen says the group is pulling its figures from a pair of city reports on how much the tax could generate from the city. 

In 2016, a report from consultants KPMG estimated the levy could raise between $131 to $535 million a year. In 2021, a city staff report said the revenues could range between $191 to $575 million a year.

Those estimates are based on charging the owners of the lots a $1.50 per day, per parking spot.

Transit advocates say a parking tax could help stave off fare hikes and service cuts that will hurt people who rely on the TTC to get around the city. (CBC)

Neither report broke down in detail the intricacies of how Toronto could adopt the measure.

KPMG’s report said it could take up to two years to create a regime to administer the tax. The consultants also warned that there could be negative consequences for the city if it were to adopt the tax. That included harming both small and large businesses and creating a disincentive for businesses to set up shop in the city.

Pizey-Allen said the tax could be deployed in a strategic way to avoid harming small businesses and in specific areas of the city. These are all questions the advocates would like to see staff study, she said.

“There’s been a lot of reports but what hasn’t come forward publicly is what are the options for implementing this in Toronto, so we can have a real debate,” she said.

Moise wants staff to study parking tax 

Coun. Chris Moise, who represents Ward 13, Toronto Centre, says he’s hoping to change that. Moise says he plans to ask city staff to study the tax and how it could be implemented.

With a $993-million budget shortfall this year and cuts to the TTC on the table, no option for new revenue should be discounted, he said.

“I feel that we have to be creative in how we actually generate revenue,” he said. “And I believe the commercial tax levy for parking is one way to do that.”

Moise, who is also a TTC commissioner, said he thinks the parking tax could help stave off future cuts that hurt people who depend on transit and can’t afford fare hikes.

“I think we need to look at this differently,” he said. “Using an equity lens to make sure that we support those who need the help the most.”

Mayor John Tory announces up to $2 billion in housing related spending as part of Toronto’s 2023 budget during a press conference at city hall on Jan. 5, 2023.
Mayor John Tory is seen here announcing up to $2 billion in housing related spending as part of Toronto’s 2023 budget at city hall last week. He says he’s been told by city staff a parking tax wouldn’t raise the revenues previous reports have estimated. (Evan Mitsui/CBC)

Toronto Mayor John Tory has denied that the city could have raised over $500 million a year with such a tax. Staff have told him the revenue estimates for the tax would be lower, he said last week.

And it would take time to carefully plan and avoid harming church communities and small businesses, Tory added.

“I’ve asked for and received two reports, please go and read them,” Tory said.

“And you’ll see that they have plenty of complexities which just don’t make it an easy thing to do. And that’s not the responsible way to run the government. And I won’t run the government that way.”

Tory said he has implemented some measures from the KPMG report, including the city’s hotel tax, which is set to increase by two per cent in the 2023 budget. 

In 2017, the mayor attempted to toll the Gardiner Expressway and Don Valley Parkway to raise $200 million a year for the city, but the plan was rejected by the Liberal government of then-premier Kathleen Wynne.

Tory said any talk of new revenue tools won’t be enough to address the city’s fiscal woes alone. The city needs a better long-term financial deal from the federal and provincial governments, he said.

“It can’t be done in isolation from a real discussion about how cities are financed, especially the City of Toronto,” he said.

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