Tory says he is open to introducing new revenue tools as a way to fund SmartTrack project
Published Tuesday, November 1, 2016 10:31AM EDT Last Updated Tuesday, November 1, 2016 7:12PM EDT
Mayor John Tory says he remains opposed to hiking property taxes to help cover the city’s share of SmartTrack but is open to the possibility of introducing other revenue tools as a means to fund his signature project.
Tory made the comment on Tuesday morning following a meeting with Premier Kathleen Wynne at Queen’s Park.
The previously scheduled meeting came one day after the release of a report by City Manager Peter Wallace that indicated that the current financing model for SmartTrack would still leave a deficit that would be equivalent in size to a 2.1 per cent property tax increase.
Under the current cost-sharing agreement with the province, the city will be on the hook for an estimated $2 billion to build six new SmartTrack stations and the Eglinton West LRT (the western portion of SmartTrack).
For his part, Tory has long contended that the city will be able to pay for its share of SmartTrack through development charges and tax incremental funding, however the report said that a tax increase could still be “necessary” in order to fund shortfalls in the “early” years of the project.
“I have already acknowledged that there are differences between the plan as it was articulated during the election when we did not have the benefit of all the studies and we have had to make changes but what I would point out is that what I said during the election campaign was that we would not raise property taxes to build SmartTrack,” Tory said on Tuesday. “While the report made references to the possibility that you could raise property taxes it also said that there could be other revenue streams that could be developed to pay for our share. That is precisely why two or three weeks from now we will be having a debate at city hall to talk about those other revenue streams that will pay for transit and housing.”
Parking and alcohol tax among possible revenue tools
In June, a city-commissioned report prepared by KPMG outlined numerous revenue tools that the city could put in place, including an alcohol tax, a parking tax, and an entertainment tax. The report also said that the city could revive the vehicle registration tax which was scrapped by then-mayor Rob Ford in 2010.
Tory said that city staff are currently completing the “proper analysis” on the KPMG report and their findings are expected to be tabled later this month.
In the interim, Tory said he would not comment on which revenue tools he favours.
“As much as you ask me week after week which are my favourites, which do I pick, we are awaiting a report from our professional public servants,” he said. “As soon as that is done give me a reasonable period of time to read the staff report and I will have some comments for you.”
Though Tory has been tight-lipped about specific revenue tools that the city could introduce to fund SmartTrack and other transit projects he did tell reporters on Tuesday that he mentioned a possibility of a hotel tax during his meeting with Wynne and that she “indicated some willingness” to consider it.
That tax, however, will generate “nowhere near enough money” to fund the SmartTrack shortfall, according to one city councillor.
“I will tell you right now that is nowhere near enough money for what is on the table in front of us,” Coun. Gord Perks said on Tuesday. “At present I don’t see the value here for Torontonians (with SmartTrack). There are a lot of things that our planning staff have identified as first priorities — maintaining the service we have got, getting going with the downtown relief line, having a good state of repair – all of those have been shoved to the back so we can invest public money from the citizens of Toronto to pay for a provincial initiative and label it according to the mayor’s campaign platform. That is not a good enough rationalization to pay for what is in front is us.”
The Ontario government is paying $3.7 billion for infrastructure that supports SmartTrack, with most of that money going towards the cost of electrifying GO transit rail.
The report also assumes that Mississauga and the Greater Toronto Airports Authority will contribute $470 million to the project and that the federal government would follow through on its commitment to provide a further $1.2 billion in funding.
“I will leave the council discussion to Toronto City Council but I will say that I think there is a shared desire on the part of all government officials and frankly among the people we represent to get past the talk and get the shovels in the ground to build transit,” Ontario Transportation Minister Steven Del Duca told CP24 on Tuesday. “That’s what the mayor and the premier, and myself are focused on.”
Tory’s comments to reporters this morning comes ahead of an emergency executive committee meeting later today to discuss Wallace’s report.
In addition to pointing out the shortfall in SmartTrack financing, that report also stated that the city will be responsible for the operating costs for the provincially built and maintained LRT lines planned for Sheppard and Finch avenues.