The Mayor wants to create an infrastructure piggy bank, with a few coins to start.
Mayor John Tory has just announced a new City Building Fund, but it could be loaded with more rhetoric than cash.
“This initiative will allow us to pay for transit and housing projects across Toronto, just as we are all working together to help improve transit in Scarborough,” reads a press release from the Mayor’s office. The news was announced at his annual State of the City address for the Economic Club of Canada this afternoon.
Beginning in 2017 the fund will pay for transit and housing projects. It will be financed by a 0.5 per cent annual property tax levy over the next five years. Each 0.5 per cent increase generates an additional $13 million annually, which means the fund will see $13 million a year in the first years, $26 million in the second year, and $65 million in year five when the levy will be lifted.
But the amount the fund would generate annually is a far cry from the City’s most pressing needs.
The announcement comes after yesterday’s public address by city manager Peter Wallace, in which he indicated that the City needed new revenue models to fund its $23 billion worth of unfunded capital projects (including the George Street Revitalization project, TCHC repairs, and Lower Don flood protection).
The fund will generate $13 million annually, and will exist on top of the annual property tax hike, resulting in a total revenue of $65 million per year by the fifth year of the tax (at which point the levy will be built into the base budget and go into general revenue).
That’s not a lot of money in light of Wallace’s admonishments; $13 million or $65 million dollars annually doesn’t solve the $2.6 billion required over the next decade for repairs for the Toronto Community Housing Corp., or the $2.8 billion needed for TTC repairs and replacements by 2025.
Because it’s framed as a separate levy, the fund appears to keep property taxes bellow inflation—a key election promise Tory has tried to maintain. Yet adding it on top of the existing property appears to be a PR-work-around without explicitly acknowledging the difficulty to address infrastructure needs while keeping property taxes at or below inflation.
Tory yesterday: https://t.co/g9R4u1YsMN
— Jennifer Pagliaro (@jpags) December 2, 2015
Tory added that the fund would be “applied where it is intended to be, large-scale projects that will make a difference to the lives of Toronto residents.”
It is unclear how far the fund will go to solve those goals.
This post originally stated that the City Building Fund would generate $13 million, without clarifying that the amount would increase over time as the levy is increased. The article has been updated.