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.
EDMONTON – Jake Allen made 31 saves for his second shutout of the season and 26th of his career as the New Jersey Devils closed out their Western Canadian road trip with a 3-0 victory over the Edmonton Oilers on Monday.
Jesper Bratt had a goal and an assist and Stefan Noesen and Timo Meier also scored for the Devils (8-5-2) who have won three of their last four on the heels on a four-game losing skid.
The Oilers (6-6-1) had their modest two-game winning streak snapped.
Calvin Pickard made 13 stops between the pipes for Edmonton.
TAKEAWAYS
Devils: In addition to his goal, Bratt picked up his 12th assist of the young season to give him nine points in his last eight games and now 15 points overall. Nico Hischier remains in the team lead, picking up an assist of his own to give him 16 points for the campaign. He has a point in all but four games this season.
Oilers: Forward Leon Draisaitl was held pointless after recording six points in his previous two games and nine points in his previous four. Draisaitl usually has strong showings against the Devils, coming into the contest with an eight-game point streak against New Jersey and 11 goals in 17 games.
KEY MOMENT
New Jersey took a 2-0 lead on the power play with 3:26 remaining in the second period as Hischier made a nice feed into the slot to Bratt, who wired his third of the season past Pickard.
KEY RETURN?
Oilers star forward and captain Connor McDavid took part in the optional morning skate for the Oilers, leading to hopes that he may be back sooner rather than later. McDavid has been expected to be out for two to three weeks with an ankle injury suffered during the first shift of last Monday’s loss in Columbus.
OILERS DEAL FOR D-MAN
The Oilers have acquired defenceman Ronnie Attard from the Philadelphia Flyers in exchange for defenceman Ben Gleason.
The 6-foot-3 Attard has spent the past three season in the Flyers organization seeing action in 29 career games. The 25-year-old right-shot defender and Western Michigan University grad was originally selected by Philadelphia in the third round of the 2019 NHL Entry Draft. Attard will report to the Oilers’ AHL affiliate in Bakersfield.
UP NEXT
Devils: Host the Montreal Canadiens on Thursday.
Oilers: Host the Vegas Golden Knights on Wednesday.
This report by The Canadian Press was first published Nov. 4, 2024.
KANSAS CITY, Mo. (AP) — Patrick Mahomes threw for 291 yards and three touchdowns, and Kareem Hunt pounded into the end zone from two yards out in overtime to give the unbeaten Kansas City Chiefs a 30-24 win over the Tampa Bay Buccaneers on Monday night.
DeAndre Hopkins had two touchdown receptions for the Chiefs (8-0), who drove through the rain for two fourth-quarter scores to take a 24-17 lead with 4:17 left. But then Kansas City watched as Baker Mayfield led the Bucs the other way in the final minute, hitting Ryan Miller in the end zone with 27 seconds to go in regulation time.
Tampa Bay (4-5) elected to kick the extra point and force overtime, rather than go for a two-point conversion and the win. And it cost the Buccaneers when Mayfield called tails and the coin flip was heads. Mahomes and the Chiefs took the ball, he was 5-for-5 passing on their drive in overtime, and Hunt finished his 106-yard rushing day with the deciding TD plunge.
Travis Kelce had 14 catches for 100 yards with girlfriend Taylor Swift watching from a suite, and Hopkins finished with eight catches for 86 yards as the Chiefs ran their winning streak to 14 dating to last season. They became the sixth Super Bowl champion to start 8-0 the following season.
Mayfield finished with 200 yards and two TDs passing for the Bucs, who have lost four of their last five.
It was a memorable first half for two players who had been waiting to play in Arrowhead Stadium.
The Bucs’ Rachaad White grew up about 10 minutes away in a tough part of Kansas City, but his family could never afford a ticket for him to see a game. He wound up on a circuitous path through Division II Nebraska-Kearney and a California junior college to Arizona State, where he eventually became of a third-round pick of Tampa Bay in the 2022 draft.
Two year later, White finally got into Arrowhead — and the end zone. He punctuated his seven-yard scoring run in the second quarter, which gave the Bucs a 7-3 lead, by nearly tossing the football into the second deck.
Then it was Hopkins’ turn in his first home game since arriving in Kansas City from a trade with the Titans.
The three-time All-Pro, who already had caught four passes, reeled in a third-down heave from Mahomes amid triple coverage for a 35-yard gain inside the Tampa Bay five-yard line. Three plays later, Mahomes found him in the back of the end zone, and Hopkins celebrated his first TD with the Chiefs with a dance from “Remember the Titans.”
Tampa Bay tried to seize control with consecutive scoring drives to start the second half. The first ended with a TD pass to Cade Otton, the latest tight end to shred the Chiefs, and Chase McLaughlin’s 47-yard field goal gave the Bucs a 17-10 lead.
The Chiefs answered in the fourth quarter. Mahomes marched them through the rain 70 yards for a tying touchdown pass, which he delivered to Samaje Perine while landing awkwardly and tweaking his left ankle, and then threw a laser to Hopkins on third-and-goal from the Buccaneers’ five-yard line to give Kansas City the lead.
Tampa Bay promptly went three-and-out, but its defence got the ball right back, and this time Mayfield calmly led his team down field. His capped the drive with a touchdown throw to Miller — his first career TD catch — with 27 seconds to go, and Tampa Bay elected to play for overtime.
UP NEXT
Buccaneers: Host the San Francisco 49ers on Sunday.
NASHVILLE, Tenn. (AP) — Darcy Kuemper made 16 saves for his first shutout of the season and 32nd overall, helping the Los Angeles Kings beat the Nashville Predators 3-0 on Monday night.
Adrian Kempe had a goal and an assist and Anze Kopitar and Kevin Fiala also scored. The Kings have won two of their last three.
Juuse Saros made 24 saves for the Predators. They are 1-2-1 in their last four.
Kopitar opened the scoring with 6:36 remaining in the opening period. Saros denied the Kings captain’s first shot, but Kopitar collected the rebound below the goal line and banked it off the netminder’s skate.
Fiala, a former Predator, made it 2-0 35 seconds into the third.
The Kings held Nashville to just three third-period shots on goal, the first coming with 3:55 remaining and Saros pulled for an extra attacker.
Elsewhere in the NHL on Monday:
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DEVILS 3 OILERS 0
EDMONTON, Alta. (AP) — Jake Allen made 31 saves for his second shutout of the season and 26th of his NHL career, helping the New Jersey Devils close their western Canadian road trip with a 3-0 victory over the Edmonton Oilers.
Jesper Bratt had a goal and an assist and Stefan Noesen and Timo Meier also scored. The Devils improved to 8-5-2. They have won three of their last four after a four-game skid.
Calvin Pickard made 13 saves for Edmonton. The Oilers had won two straight.
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