News / Toronto

Does Toronto need a municipal sales tax?

The first in Metro's new series examining possible revenue tools for the City of Toronto.

Ward 33 Coun. Shelley Carroll wants the province to grant the city power to levy a municipal sales tax.

Torstar News Service file

Ward 33 Coun. Shelley Carroll wants the province to grant the city power to levy a municipal sales tax.

Facing an operating budget with a $57 million shortfall and no way to pay for some $22 billion in infrastructure projects, politicians in Toronto seem to have accepted the city has a revenue problem. Filling holes in the city’s coffers will undoubtedly require a property tax increase. Various councillors, meanwhile, are floating a number of ideas on how to bring in more revenue over and above that.

Starting today, Metro will be looking at their proposals. Have an idea of your own? Email

A municipal sales tax?

Ward 33 Coun. Shelley Carroll is proposing a municipal sales tax. She says adding one per cent to the HST on all local purchases could bring in $500 million in revenue annually.

Under the City of Toronto Act, the municipal government isn’t allowed to levy a sales tax, but Carroll is confident the provincial government would acquiesce if the city was “brave enough” to ask for it.

“All of the other revenue tools in the City of Toronto Act, they could earn about $12 million here or $3 million there. But with a sales tax, we’re talking about half a billion dollars every year. It would radically impact the future of transportation and everything else in this city,” she said.

Carroll believes property tax hikes unfairly impact older Torontonians living on fixed incomes. They may have benefitted from rising real estate values, but unless they sell their homes, they don’t have access to those funds.

A sales tax, in contrast, impacts those with more disposable income, she said.

“Look, if you can afford a $20,000 dress at a fancy shop on Bloor Street, I want a lot more of your money,” she said. “You’re doing well and you’re in a better position to invest in the city, so when you’re paying your sales tax a penny should go to the city to build the Gardiner, to build bridges, to expand transit and deal with poverty.”

Carroll said that if the city is granted permission to levy a sales tax, it could take between one and two years to implement.

More on