News / Toronto

Tory's inner circle backs road tolls but looks to limit other taxes

Executive committee votes to consider only a tax on hotel and short-term accommodations, road tolls, and cancelling a rebate for vacant businesses.

Mayor John Tory announced support for a hotel tax and other revenue tools in a bid to fix Toronto's perennial budget shortfall during a Toronto Board of Trade luncheon last week.

Steve Russell/Toronto Star

Mayor John Tory announced support for a hotel tax and other revenue tools in a bid to fix Toronto's perennial budget shortfall during a Toronto Board of Trade luncheon last week.

Mayor John Tory’s inner circle has backed his pitch for road tolls on the Gardiner Expressway and Don Valley Parkway while moving to limit what other taxes could be used to raise badly-needed revenues for the city.

On Thursday evening, the executive committee voted unanimously to consider only a tax on hotel and short-term accommodations, road tolls, and cancelling a rebate for vacant businesses as new measures. The executive also asked that harmonizing the municipal land transfer tax with the provincial land transfer tax still be on the table.

The final decision on which new taxes and fees to move ahead with is up to council, which meets later this month.

“I would say, let’s take this one step at a time and I’m very gratified that the city manager and many other people out there that are objective observers of the city say that what we’re trying to do here is a courageous, good start,” Tory told reporters ahead of the vote.

“And I’ll take courageous, good start and move that forward and get that done before I start to worry about what else we’re going to do on any which side of the city’s financial problems.”

City staff had recommended council also consider additional avenues to raise significant funds — such as a levy on commercial parking spaces and reintroducing the vehicle registration tax — as city manager Peter Wallace warned of a remaining budget gap next year and future pressures.

Tory’s short-term financial vision, which includes the hotel tax and cancelling the vacancy rebate is only expected to raise around $42 million. The submitted 2017 budget gap for the TTC alone is $61 million.

Council critics warned Tory’s plan won’t be enough.

“Don’t tell Torontonians you’ve solved the problem when you haven’t!” said Councillor Gord Perks. “We’re going to be in a position of increasing taxes and cutting services at the same time for several years now, unless the mayor’s willing to add some other element to the mix.”

Perks said property taxes kept at the rate of inflation, as Tory has promised, will not get the city’s “nose above water” and the mayor needs to re-consider that plan.

Tory was praised for backing road tolls by several community and business groups who spoke at the committee Thursday, while some executive members representing suburban neighbourhoods were more cautious.

The mayor’s deputy, Councillor Denzil Minnan-Wong suggested a yearly cap on tolls for drivers who live in Toronto, saying he would be challenged to support a toll that would overly burden his residents.

At committee, Wallace, the city’s top bureaucrat, said councillors can no longer afford to approve spending without putting money in the bank.

Though he said road tolls were a “very good start,” he said “of course, it’s not going to be sufficient” to cover some $33 billion in new transit and other capital projects that today remain unfunded.

As of Thursday, Wallace drew a line for council by planning to present, for the second year in a row, a budget that is not balanced. By law, the city’s budget must be balanced, which means it will be up to council to make the hard choices: cut services or raise revenues. If more revenues aren’t secured, Wallace has said short-term measures such as drawing on reserve funds, which he has warned against, are likely.

Budget chief Gary Crawford said several city divisions have found “tens of millions” in savings for next year after Tory’s across-the-board request to find 2.6 per cent in reductions. Crawford said he isn’t willing to consider any tools other than those passed at executive, while promising important services won’t be cut.

“They’re fair, they’re affordable and I think they’re transparent,” he said of the measures backed by John Tory. “I’m quite comfortable with what has gone through.”

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