Revenue Tools

One of the main reasons Toronto needs to be a charter city is so we have more powers to generate revenue.  Cities have to deal with most of the concerns of residents, including providing affordable housing, and yet have the least ability to collect revenue.  Toronto is the tax revenue cash cow of the province and the feds, sending far more to senior governments than we receive back in services or transfers, so we need to find new ways to fund the needs of our residents.

Vacancy taxes

Toronto should crank the vacant unit tax so high that you would be stupid to not sell it or rent it out, open up all that vacant housing while raising revenues. It should also double every year the unit is vacant. The city also needs to start actually checking vacancies, right now it’s an honour system of self-reporting and that’s open to be gamed.

We also need to apply the same logic to a commercial storefront vacancy tax. As we have seen on Queen St E for over a decade, property owners waiting to sell to a developer leave their storefronts empty because it’s actually more of a hassle to buy out a business tenant than relocate a residential tenant. These are landlords who have owned their building outright for years, and with the residential income from units above the storefront they don’t need the income from a business and can leave the commercial space empty. So if they can afford to leave it empty they can afford to lower the rent or pay a tax, a tax that will also double every year it’s empty. And if a property owner doesn’t like to idea of locking into a longer lease with a commercial tenant, they can do popups and bring some temporary variety to the street.

We also need to start taxing vacant lots where there are completed development applications but the developer it just sitting on the property waiting for the market to swing their way. If they don’t want to pay the tax either they develop or they transform the space into something temporary for the community, like a parkette or the pickleball courts that sprung up downtown.

Payment in lieu of taxes

The federal government is exempt from paying property taxes, but has agreed in many cases to payment in lieu of taxes.  The problem is they sometimes do not pay up, or have left certain things exempted (like wharves and dry docks).  We must pressure the feds to continue paying their fair share for the property they own in our city, and ensure it is even across all properties and paid in a timely manner.

Vehicle registration tax

We need our vehicle registration tax back, but a progressive one that takes into account the gas mileage of the vehicle, the number of drivers sharing the vehicle, the number of dependents living in the household, and the number of vehicles at that address.  I have devised a possible formula for such a tax:

(1/miles per gallon) x 2000 / (# of dependents + 1) / (# of drivers / # of vehicles/1.5)

For example, a Lexus LX570 with one driver, one car, and no dependents at 14 MPG would be $214.29, whereas a Hyundai Elantra Hybrid Blue with two drivers, one car, and 2 dependents at 48 MPG would be $10.42.  There would be no charge for fully electric vehicles and perhaps a $5 flat fee for gas-powered motorcycles.  You can play with the formula yourself here.

Road tolls

One of the few progressive moves Tory has made as mayor was calling for road tolls on the Gardiner, unfortunately Premier Wynne denied him.  All our major highways should have road tolls, but only for non-residents, cars registered at Toronto addresses should not have to pay.

Gas tax

We do not just need a larger share of the gas tax, we need our own gas tax on top of that.  Yes this may cause drivers on the outskirts to cross out of Toronto to buy their gas, but as long as the gas tax is not too exorbitant that behaviour should be minimal while still bringing in a few millions dollars. However, businesses should be exempt from this tax.

Municipal Land Transfer Tax

The MLTT is the only progressive property tax we have because it has brackets for different home values.  But it needs updating to reflect higher home prices (meaning it can be lowered, especially for less expensive homes), and should have one extra bracket at the top for the truly extravagant homes that take up so much more space and services than other homes, like the monster mansions on the Bridle Path. Also, as I feel should happen with property taxes, it should be based on a unit value assessment not a market value assessment.

Business Occupancy Tax

Once upon a time Toronto had a Business Occupancy Tax (BOT) that would be collectible from the business itself not the property owner as part of their property taxes. In particular, banks had a different class of BOT.

Our banks are obscenely profitable, with some of the highest fees in the world. As the financial center of Canada Toronto should be benefiting from Big Finance as much as possible. Toronto should reinstitute a BOT just for financial firms and businesses above a certain size. This of course requires the province to change laws, but as mentioned elsewhere, we need a divorce from the province to do what’s best for the city.