Chow's executive committee refers proposed commercial parking tax back to city staff

A proposal to impose tax on commercial parking across Toronto, which could generate as much as $150 million for the city, has been sent back to city staff for further study.

On Thursday, Mayor Olivia Chow’s executive committee voted in favour of a motion by Councillor Shelley Carroll to refer the proposal back to Stephen Conforti, the city’s chief financial officer and treasurer.

• Download our app to get alerts on your device
• Get the latest local updates right to your inbox

Conforti has been directed to submit a report before the 2025 budget process on the results of public communications and stakeholder engagement, refined estimates and design scenarios and a final implementation plan.

Carroll’s motion also requests the city manager and Conforti to undertake a comprehensive parking inventory.

In their initial proposal, staff recommended that a city-wide levy be applied on all commercial parking, both public and private, with two distinct geographical zones.

Commercial parking in Zone A, defined as downtown and central waterfront, would be taxed $0.49 per parking spot, and all other areas, referred to as Zone B, would be taxed $0.25 per spot.

The levy would include both unpaid and fee-paid parking lots, including surface parking, underground parking and parking garages.

There would be an automatic exemption for the first 300 square metres of parking for each business, which amounts to about 10 parking spaces.

The tax would add between $100 and $150 million to city coffers each year, staff said.

The city said there are an estimated one million commercial parking spaces in Toronto and about 23,000 commercial properties would have been subject to the levy.

Based on an average of 44 parking spots, the impact to an individual business in Toronto is estimated to be between $2,970 and $5,940 per year, depending on location, staff said.

For larger businesses, the price tag would be much steeper.

The city estimates that a large downtown shopping centre with about 144,000 square metres of parking would pay more than $800,000 each year. A large downtown office space with 42,000 square metres of commercial parking would be looking at an annual tax of more than $200,000.

While staff note that the primary objective of the tax is to raise money for the cash-strapped city, there are multiple other benefits to a commercial parking levy.

“The introduction of a parking levy is expected to have a positive impact on City priorities and objectives, including reducing congestion and positively contributing to climate action by encouraging Torontonians to use transit or other means to travel,” city staff wrote.

Staff noted that to effectively bill and collect a parking levy, the city will need to develop and maintain an accurate inventory of parking areas. It is estimated that it could take between 12 and 18 months to develop that inventory, update billing systems, complete testing and notify commercial property owners.