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.
TAMPA, Fla. (AP) — The Tampa Bay Lightning selected Victor Hedman as the team captain on Wednesday as training camp opened, making the big defenseman the successor to Steven Stamkos.
Hedman, who is going into his 16th season with Tampa Bay, was considered the obvious choice to get the “C” after the Lightning did not re-sign Stamkos and their longtime captain left to join Nashville.
“Victor is a cornerstone player that is extremely well respected by his teammates, coaches and peers across the NHL,” general manager Julien BriseBois said. “Over the past 15 seasons, he has been a world-class representative for our organization both on and off the ice. Victor embodies what it means to be a member of the Tampa Bay Lightning and is more than ready for this exciting opportunity. We are looking forward to watching him flourish in his new role as we continue to work towards our goal of winning the Stanley Cup.”
The 33-year-old from Sweden was a key contributor in the Lightning hoisting the Cup back to back in 2020 and ’21, including playoff MVP honors on the first of those championship runs. Hedman also took home the Norris Trophy as the NHL’s top defenseman in 2018 and finished in the top three in voting five other seasons.
Ryan McDonagh, who was reacquired early in the offseason in a trade with the Predators, and MVP finalist Nikita Kucherov will serve as alternate captains with the Lightning moving on to the post-Stamkos era.
TORONTO – While Toronto FC is looking to improve its position on the pitch, general manager Jason Hernandez is trying to do the same off it.
That has been easier said than done this season.
Sending winger Jahkeele Marshall-Rutty to CF Montreal for up to $1.3 million (all dollar figures in U.S. funds) in general allocation money before the secondary transfer window closed in early August helped set the stage for future moves.
But there have been plenty of obstacles, which Hernandez has been working to clear.
“We feel a lot more confident going into this upcoming off-season that we did the one prior,” said Hernandez. “There’s a level of what I would say booby-traps that were uncovered when I first got the (GM) role at the end of last summer.”
The club is paying off departed forwards Adam Diomande and Ayo Akinola as well as a $500,000 payment due in 2024 to Belgium’s Anderlecht for Jamaican international defender Kemar Lawrence. That payment was part of the transfer fee for Lawrence, who joined TFC from Anderlecht in May 2021 and was traded to Minnesota United in March 2022.
Diomande was waived while Akinola’s contract was terminated by mutual agreement.
“That comes to an end in ’25, which is nice,” said Hernandez. “We had to suffer from a salary cap perspective this season. But those things coming off, the Jahkeele Marshall-Rutty money coming in, we’re going to be in a position to make some good additions, which is positive.”
While MLS clubs are allowed one contract buyout per year, Toronto had already used its on former captain Michel Bradley, who retired after last season. Bradley had previously restructured his contract, deferring money.
TFC’s only other move during the summer transfer window was the signing of free-agent defender Henry Wingo. Hernandez said the club knew going into the window that it was likely limited to the one acquisition “unless other business happened”
“We knew we had this bucket of money and we knew we were going to go get Henry,” said Hernandez.
While the sale of the highly touted Marshall-Rutty opened up other possibilities, it came on the eve of the transfer window closing. And the team did not like what it saw in the free-agent market.
“A lot of the opportunities we were presented in the free agency space felt more like a short-term, Band-Aid decision versus what actually the club probably needs.”
Hernandez was not willing to take in players who came with a “club-friendly” salary cap charge in 2024 and a much bigger number in 2025.
Instead, Toronto promoted forward Charlie Sharp and wingback Nate Edwards to the first team from TFC 2 ahead of last Friday’s roster freeze.
MLS teams are operating on a salary budget of $5.47 million this season, which covers up to 20 players on the senior roster (clubs can elect to spread that number across 18 players). But the league has several mechanisms that allow those funds to go further, including using allocation money (both general and targeted) to buy down salaries.
Designated players only count $683,750 — the maximum salary charge — against the cap no matter their actual pay. Toronto’s Lorenzo Insigne is actually earning $15.4 million with fellow Italian Federico Bernardeschi collecting $6.295 million and Canadian Richie Laryea $1.208 million.
Hernandez says Laryea’s contract can — and “very likely” will — be restructured so as to remove the designated player status.
There are benefits in going with just two designated players rather than three.
Teams that elect to go with two DPs can sign up to four players as part of the league’s “U22 Initiative.” The pluses of that structure include a reduced salary cap charge for the young players and up to an extra $2 million in general allocation money.
Hernandez says the club is currently pondering whether that is the way to go.
Captain Jonathan Osorio who is earning $836,370 this season, restructured his deal to allow the team to sign Laryea as a DP. In doing so, Osorio had his option year guaranteed so his contact runs through 2026.
Hernandez and coach John Herdman will have decisions to make come the end of the year.
The contracts of goalkeeper Greg Ranjitsingh ($94,200), defenders Kevin Long ($277,500), Shane O’Neill ($413,000) and Kobe Franklin ($100,520), midfielder Alonso Coello ($94,050) and Brandon Servania ($602,710), and forward Prince Owusu ($807,500) — all on the club’s senior roster — expire at the end of 2024 with club options to follow.
While there is more work to do, Hernandez believes TFC is on the right road.
Toronto, which finished last in the league at 4-20-10 in 2023, went into Wednesday’s game against visiting Columbus in a playoff position at eighth in the East at 11-15-3.
“By every metric, we are miles ahead of where we were at this point last year,” said Hernandez.
“That’s a low bar, so that’s not saying much,” he added.
But he believes TFC is “quite competitive” when it has all its players at its disposal.
“To get results in this final stretch, we’re going to need our prominent players to really show up and have big performances, and be supported by the rest of the cast.”
After Columbus, TFC plays at Colorado and Chicago and hosts the New York Red Bulls and Inter Miami. The club also travels to Vancouver for the Canadian Championship final.
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This report by The Canadian Press was first published Sept. 18, 2024
Mackenzie Hughes might just be what the International team needs as this year’s Presidents Cup.
Hughes, from Dundas, Ont., is one of three Canadians on the squad competing in the match-play event at Royal Montreal Golf Club next week.
His putting skills, cool demeanour under pressure, pre-existing connections with teammates and clubhouse leadership could help the team — made up of non-American players outside Europe — end a nine-tournament losing skid to the United States at the biennial event.
“I’ve had this one circled on the calendar for a few years now,” said Hughes on joining fellow Canadians Taylor Pendrith and Corey Conners as captain’s picks on the 12-player International team. “I pretty much knew that when it was announced the tournament would be in Canada and that Mike Weir was going to be the captain, you pretty much knew where that was going to go.
“To get that call from (Weir) is really special because he’s the guy that I looked up to, we all looked up to, as Canadian golfers.”
Pendrith and Conners are returning to the team after a disappointing 17 1/2 to 12 1/2 loss to the United States at Quail Hollow Club in Charlotte, N.C. in 2022.
Hughes was ranked 14th on the International team standings in 2022 and could have easily been included on that squad after Australia’s Cameron Smith and Chile’s Joaquin Niemann were ruled ineligible after jumping ship to the rival LIV Golf circuit.
However, captain Trevor Immelman of South Africa instead chose the lower ranked Christiaan Bezuidenhout (16th) of South Africa, Pendrith (18th), South Korea’s Kim Si-woo (20th) and Australia’s Cameron Davis (25th).
“I certainly wanted to be on that team but also I understood the picks,” said Hughes, who lives in Charlotte and plays at Quail Hollow regularly. “I think that like a lot of guys that don’t get picked you more so look back on your own play and I wish I had made that selection easier for them.
“I didn’t do myself any favours in the six weeks leading up to it and that’s a hard pill to swallow.”
It may have been a costly oversight on Immelman’s part, as finishing holes was an issue for the International team in 2022 and Hughes is one of the best putters on the PGA Tour. This season he’s third in shots gained around the green and fifth in shots gained from putting.
“It doesn’t mean that just because I was there it would have turned the tide, but I’d like to think maybe I could have helped,” said Hughes. “That’s why you play the matches. You have to get out there and do it.”
This year Hughes made it easier for Weir, the Canadian golf legend from Brights Grove, Ont., to choose him. Hughes is 51st in the FedEx Cup Fall standings and has made the cut seven tournaments in a row, including a tie for fourth at last week’s Procore Championship.
“Mac played very solidly all year. Really like his short game, an all-around short game,” said Weir on Sept. 3 after announcing his captain’s picks. “He’s one of the elite and best short game guys on the PGA Tour
“I also love Mac’s grit. So that was the reason I picked him.”
Hughes’s intangible qualities go beyond grit.
He, Pendrith and Conners will arrive at Royal Montreal as a unit within the International squad, having become close friends while playing on Kent State University’s men’s golf team before turning pro. They’re also part of a group of Canadians, including Nick Taylor and Adam Hadwin of Abbotsford, B.C., that regularly practice together before PGA Tour events.
“To have those guys with me is really icing on the cake, it’s very special,” said Hughes. “Opportunities like this don’t come around very often: to play this kind of team competition, which is already hard to do, but to play with some of your best friends, it almost seems scripted.”
An 11-year professional, Hughes has also been a member of the PGA Tour’s player advisory council the past two years and has been an outspoken advocate for making professional golf more accessible to fans.
Although Weir relied heavily on analytics to make his captain’s selections, Hughes’s character came up again and again when asked why he was named to the team.
“I just have a gut feeling with Mac that he has what it takes in these big moments,” said Weir. “They’re big pressure moments, and I have a feeling he’s going to do great in those moments.”
DP WORLD TOUR — Aaron Cockerill of Stony Mountain, Man., continues his chase for a spot in the Europe-based DP World Tour’s playoffs. The top 50 players on the Race to Dubai standings make the DP World Tour Championship and Cockerill moved eight spots up to 39th in the rankings after tying for ninth at last week’s Irish Open. He’ll be back at it on Thursday at the BMW PGA Championship at the Wentworth Club in Surrey, England.
KORN FERRY TOUR — Myles Creighton of Digby, N.S., is ranked 38th on the second-tier Korn Ferry Tour’s points list. He leads the Canadian contingent into this week’s Nationwide Children’s Hospital Championship. He’ll be joined at Ohio State University Golf Club — Scarlet Course in Columbus, Ohio by Edmonton’s Wil Bateman (53rd), Etienne Papineau (65th) of St-Jean-Sur-Richelieu, Que., and Sudarshan Yellamaraju (99th) of Mississauga, Ont.
CHAMPIONS TOUR — Calgary’s Stephen Ames is the lone Canadian at this week’s Pure Insurance Championship. He’s No. 2 on the senior circuit’s points list. The event will start Friday and be played at Pebble Beach Golf Links and Spyglass Hill Golf Course in Monterey, Calif.
LPGA TOUR — There are four Canadians in this week’s Kroger City Championship. Savannah Grewal (97th in the Race to CME Globe Rankings) of Mississauga, Ont., Hamilton’s Alena Sharp (115th), and Maude-Aimee Leblanc (142nd) of Sherbrooke, Que., will all tee it up at TPC River’s Bend in Maineville, Ohio.
EPSON TOUR — Vancouver’s Leah John is the low Canadian heading into the Murphy USA El Dorado Shootout. She’s 54th in the second-tier tour’s points list. She’ll be joined by Maddie Szeryk (118th) of London, Ont., and Brigitte Thibault (119th) of Rosemere, Que., at Mystic Creek Golf Club in El Dorado, Ark.
This report by The Canadian Press was first published Sept. 18, 2024.
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