Please Council, Don’t Make the Same Revenue Tools Mistakes You Made Last Time

Toronto needs significant budget remedies. But first council needs to fix itself.

By David Hains

Photo by Paul Flynn from the Torontoist Flickr Pool.

The last time council had a debate like this, they voted down almost every possible revenue tool, said they would like more transit lines, and kicked off the Scarborough subway extension in the process. It was the most shameful debate in the Rob Ford era.

And now we prepare to do it again.

This time, it might not be quite as bad, but that’s an extremely low bar. For the revenue tools debate to really serve the city, council will need to show a level of political courage and nuance that it has left hidden to this point.

Based on recent comments by budget chief Gary Crawford (Ward 36, Scarborough Southwest), that might not change anytime soon.

In an interview with the Toronto Sun’s Sue-Ann Levy, Crawford indicates that the potential revenue tools would be limited, and the direction of those funds would be too.

While Crawford doesn’t know (or wouldn’t say) exactly what will be proposed, it seems road tolls, a parking levy, a hotel tax and the $60 Personal Vehicle Tax (the one Ford got rid of as soon as he was elected) — plus one or two others — are on the table.

“They all need to be dedicated (to capital needs),” Crawford said. “I’m not supporting anything for operating (budgets).”

There are two issues to unpack here. One is that the revenue tools listed here bring in very limited revenue. A $60 vehicle registration tax, which is relatively easy to implement, would generate around $60 million per year. A hotel tax, which John Tory has expressed some support for, would generate in the neighbourhood of $15 million, depending on how it’s implemented.

Road tolls seem unlikely, given that Tory tried to win the 2003 mayoralty in part on a spirited campaign that David Miller would commit “highway robbery” with road tolls. You can still see the website. A parking lot tax could get between $175 million and $350 million, but this council loves its cars. In the context of a $30-billion backlog of unfunded but approved capital projects, or potential transit projects that would need around $1 billion per year to roll out, this is not much money.

Then there is another problem in Crawford’s statement—the operating budget desperately needs support. The capital budget is dedicated to the big, long-term projects. Think Scarborough subway extension, Nathan Phillips Square renovation, flood protection—that sort of thing. The operating budget takes care of the short-term needs: paying for custodial staff to keep Nathan Phillips Square clean, or bus drivers to get people to a subway stop. These are regular ongoing expenses that support programs and services. And in many cases, they’re desperately underfunded.

It creates a dynamic where council explores the feasibility of Rail Deck Park, which would cost $1 billion-plus, but doesn’t fund the parks programming plan they unanimously agreed to. Or council likes the idea of spending $3.2 billion on one subway stop, but will increase fares and decrease existing service.

A successful revenue tools debate deserves the full context, and not just the budget information that we want to hear. Making a dent in our ongoing infrastructure challenges will take way more than the tools that might be on the table—a one cent sales tax would come much closer to meeting our needs than a hotel tax, for instance. And we should discuss how the different aspects of the budget relate to one another, and lots of capital projects (like transit) require operating funding to make them, you know, operate.

The challenges for Toronto’s budget are ongoing and significant, and they will not be overcome with half-measures.