Toronto is proposing a municipal sales tax as part of a slew of new measures aimed at easing a projected $46.5 billion in budget pressures over the next decade, an “unprecedented financial crisis” that if left unaddressed threatens the fiscal foundations of the city.
The recommendation to pursue a one per cent sales tax applied to existing HST/GST was one the key items included in a long-awaited staff report released Thursday. The document paints a dire picture of the city’s future without significant new revenue tools and additional assistance from the province and Ottawa.
“There will be devastating consequences for the City of Toronto and the greater region and country without serious attention given to address the city’s financial challenges,” the report says, noting the region accounts for 20 per cent of Canada’s gross domestic product (GDP) and 53 per cent of Ontario’s GDP.
“This is not just because Toronto is Canada’s economic engine and will see a ripple effect from reduced investments, job losses and reduced income taxes, but because the city will not be equipped to deliver goals on behalf of other orders of government such as housing priorities, transit expansion, refugee response or climate action,” it adds.
Speaking at a news conference later Thursday, Toronto Mayor Olivia Chow noted that even if the city adopts all of the various possible revenue tools outlined by staff in the report, they still would not generate enough money to make up for projected budget shortfalls in the long-term. Chow said Toronto taxpayers are covering the costs of programs and initiatives that should fall to the province or federal government.
City ramps up calls for more funding
“To build a city we deserve, after years of debate, we need to face facts. Including the fact that time and time again the city has been asked to step up and fund things that are a responsibility of other levels of government,” she said. Chow pointed to housing refugees, which make up one-third of the city’s 9,000 shelter residents, and long-term care, as examples.
According to the staff report, $1.1 billion of Toronto’s annual property tax revenue is spent on “extensions of federal and provincial responsibilities.”
Also speaking at the news conference, councillor and Deputy Mayor Jennifer McKelvie noted that 1.3 per cent of Ontario’s annual spending and 0.3 per cent of federal government spending goes toward services in Toronto.
“We cannot tax our way out of this structural deficit. And the revenue tools currently available to us will not fill the void alone. It is not sustainable to continue using property taxes to fund provincial and federal responsibilities,” McKelvie said.
Both federal Finance Minister Chrystia Freeland and Ontario Premier Doug Ford have repeatedly declined previous requests from the city for additional funding to address its budget hole.
On Thursday, a spokesperson for the premier’s office said the province is providing “unprecedented financial support” to cities and will continue to do so.
“We are working with Toronto on the third-party review of their finances to ensure taxpayers receive maximum value for money and the best possible service,” spokesperson Caitlin Clark said in an email.
City staff estimates a municipal sales tax would generate between $800 million and $1 billion annually, but would require the province to amend the City of Toronto Act. Toronto is facing projected budget shortfalls of between $1.5 billion and $1.7 billion for both this year and next, the report says.
Coun. Shelley Carroll, the city’s budget chief, said some large American cities already have a city sales tax.
“We’d be the first people in Canada doing that, but I dare say that is the future of Canada or any G7 country with major cities of three million or more,” Caroll said.
Asked if the province would allow the city to levy a sales tax, the spokesperson for the premier’s office did not answer directly.
“Our government is focused on keeping costs down for people, especially at a time when the cost of living is going up,” said Clark.
Municipal sales tax could generate up to $1 billion annually, budget chief says
Sales tax could help Toronto deliver on goals around transit expansion, shelter strategy and housing, according to budget chief Coun. Shelley Carroll. “If you don’t spend any money you don’t pay that tax. If you spend a lot of money you pay more of that tax. That’s why it’s the most fair way,” she said.
Explaining the reasoning for the proposed new tax at a media briefing, City Manager Paul Johnson told reporters that the city needs “something that is a game changer.”
The report also details measures the city could quickly pursue under its own authority, such as progressively higher rates of land-transfer tax on homes that sell for more than $3 million and increasing the existing vacant homes tax from one to three per cent, both pledges Chow made on the campaign trail.
Toronto city staff say in a new report Thursday that the city faces a ‘short and long-term financial crisis.’ (Michael Wilson/CBC)
Other steps include a municipal land transfer tax on foreign buyers of residential real estate, higher on-street parking fees, the implementation of a commercial parking levy — an idea floated by former mayor John Tory earlier this year before he resigned — and selling off surplus real estate assets.
“Inaction is no longer an option. And we must move forward on some of these. It’s why our recommendations in this report are action-oriented,” Johnson said.
“The failure to do so, means that we will have to take a look at other metrics, which will be devastatingly impactful to the people who live, work, play and learn in this community,” he added.
“We can’t do it alone,” says Toronto city manager on budget pressures
Toronto needs additional assistance from the provincial and federal government, along with new revenue tools, City Manager Paul Johnson said at a media briefing on Thursday.
The report also asks council to adopt a motion to have city staff develop a multi-year approach for recommending property tax rates and policies.
Searching for more funding
Staff also repeatedly stressed more funding from other levels of government is needed to prevent “significant tax increases,” major service reductions or the outright cancellations of capital projects that “align with shared goals.” They similarly noted that while some of the municipal measures could see additional revenue in city coffers as early as next year, they will not be enough to “address the city’s fiscal risks in 2024” or over the next decade.
“We need new deals, we need new ways of working with the provincial and federal government. There simply is not a pathway locally, that we can get to a stronger point of sustainability,” said Johnson.
Staff are also urging council to notify the province that “in the absence of a revised funding model,” the city will not be able to move forward with 978 new long-term care beds set to be introduced in coming years. They are also cautioning that the city could need to halt work with the provincial government on future transit projects.
Pandemic affected finances
Tory requested in February that staff look into new tools to generate more revenue, as the city faces projected $1.5 billion budget shortfalls for this year and next in the wake of the COVID-19 pandemic and a grim long-term outlook.
High-level staff have warned for years that city finances were vulnerable to a crisis. During the pandemic, costs for things like public health soared while revenues, such as those garnered from TTC fares, collapsed.
After winning a byelection in June, Chow asked that the report be expedited. Her executive committee will consider the recommendations at a special meeting on Aug. 24 before the report goes to council on Sept. 6.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
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