Advocates call for commercial parking levy to help pay for TTC

Advocates say the City of Toronto could have raised nearly $3 billion for transit and climate sectors from big corporations over the last five years if they had decided to use a commercial parking levy.

TTC Riders and Toronto Environmental Alliance (TEA) calculated how much revenue the City could have generated through this levy if they implemented it in 2018, saying it could have generated up to $575 million in additional revenue each year to a total of up to $2.875 billion.

“Instead of raising billions of dollars, this revenue tool has been left on the table since 2016, and Council requests for more information have been quietly sidelined,” the release reads.

A commercial parking levy is a tax that can be applied to non-residential commercial parking lots, which the parking lot landlord would have to pay. The two organizations note that the City can implement a commercial parking levy through the City of Toronto Act.

On top of generating more revenue, TTC Riders and TEA say the commercial parking lot levy can encourage more real estate development, support reliable transit to commercial properties, and could reduce the financial incentive for building large paved parking lots.

In a 2016 report written for the city, KPMG, a consulting firm, determined a commercial parking levy would bring in revenues from $35 million and $535.4 million annually, while a Council assessment of revenue options from 2021 said it is expected to bring $191 million to $575 million each year.

“When this was initially considered, the idea of applying it to all parking spaces across the City of Toronto raised questions about the impact that would have on churches and small businesses – two of many areas where challenges were identified and exemptions would likely be required,” Tory’s press secretary Taylor Deasley said in a statement on Monday.

The report estimates are based on charging parking lot owners $1.50 a day per parking spot.

“Considering the scale of the climate and affordability crisis in our city, it’s irresponsible to leave nearly $3 billion on the table for climate and transit investments that people need,” Sarah Buchanan, Campaigns Director at Toronto Environmental Alliance, said in a news release Monday.

“Transit cuts and fare increases will drive more people away from the TTC, working directly against the climate goals approved by the Mayor and Council.”

In 2020, city council requested a report from the CFO and treasurer to learn more about the commercial parking levy, but nothing outside of the 2021 assessment surfaced, the groups say.

The Clerk’s office indicated the report has been designated “Not Carried Forward” into the 2022 term of Council.

TTC PROPOSED BUDGET

In the proposed 2023 municipal budget, Toronto has a $53-million subsidy increase for the TTC, which will give the transit agency a total of $958 million for conventional service this year if the proposal passes.

The TTC also plans to raise fares by 10 cents.

The proposed TTC budget includes nine per cent less service this year than pre-pandemic levels. Both advocacy groups say that the cuts will have “drastic impacts on transit quality, ridership, and affordability, including subway wait times of up to 10 minutes during off-peak hours.”

“Scarborough residents already wait too long for the bus,” Scarborough transit user Ryan Wong said in the release. “Cutting service means being late for work and school, and less time with my family and friends. City Council must create a resilient future for our TTC.”

Tory’s office said introducing a parking levy is part of a larger discussion about cities being fairly funded.

“For a city that is bigger than most of the provinces of Canada, the current model, put in place in 1867, is outdated, unreliable, and unsustainable. Until there are changes, the Mayor continues to have to make responsible financial decisions,” Deasley said. 

Mayor Tory will present the budget by Feb. 1.