Revenue tools Archives

News November 10, 2017

Is the Relief Line finally spurring forward?

Earlier this week, Toronto Mayor John Tory reaffirmed his commitment and support of the Yonge Relief Line. He affirmed his support while at a conference hosted by the Canadian Council for Public-Private Partnerships to a crowd of investors, builders, and designers. This transit line has been labelled a priority by not only the mayor, but also city staff and transit experts.

City staff have already said that Line 1 will be at capacity by 2031. In the meantime, further transit lines are being built — the Eglinton Crosstown, the Yonge-Sheppard Subway Extension, and elements of SmartTrack. And these are only the city initiatives. The province is also planning to build high-speed rail connecting Windsor and Toronto. The problem is that all of these lines funnel transit riders towards the downtown core. Without a relief line in place, Toronto’s Line 1 will be packed to the brim. It’s becoming more and more important to get the relief line built — and yet decision-making is moving at a slow pace.

Council has approved the alignment of the southern end of the relief line, connecting the Bloor-Danforth line with the downtown core via Carlaw Ave.

Toronto’s relationship with the province has been rocky since Ontario Premier Kathleen Wynne refused to allow the city to collect funds using tolls on the Don Valley Parkway and the Gardiner Express, but it seems to finally be levelling out. Mayor Tory is having regular meetings with the provincial government, and seems to believe that funding is not as much of a problem as it once was. This is good news, and hopefully means the relief line can progress more quickly.

Toronto received $120 million from the federal government to fund infrastructure like the relief line, but it is at risk of losing the money because there is a time stamp attached. This means that if city staff don’t use the money by 2018, the federal government could take it away. Considering how long it takes for council to make decisions, especially when it comes to spending money on transit, this deadline is not realistic.

Mayor Tory has requested an extension of that deadline, but no answer has come. About $2.7 million of that money was earmarked to study the relief line.

Following the approval of the alignment for the relief line, city staff have begun to conduct a Transit Project Assessment Process (TPAP), which includes advancing planning and design.

News May 31, 2017

Will the province step up to fund the relief line?

Toronto Mayor John Tory is doing his best, but it doesn’t seem to be enough to convince his fellow members of council, the province, and the federal government of the basic facts — the relief line is necessary.

The mayor’s pleas seem to rest on deaf ears. While city council did push forward the preferred alignment for the Yonge Relief Line, the actual construction of this much-needed transit project is still years away. In fact, it will never be built unless the province and the federal government step up.

The problem is that politicians are too wrapped up in the next election to do what needs to be done today. Experts all agree the relief line must be built prior to 2031 when the TTC Line 1 reaches capacity. With other subway extensions and Go Rail projects bringing more people into the downtown core, the relief line becomes even more of a necessity.

And yet, the provincial government hasn’t committed to more than $150 million for the planning of the relief line.

Toronto knows the relief line is going to be expensive. With a current price tag of $3.6 billion, it’s all city councillors can talk about.

Tory came up with a possible solution early on — revenue tools. Instead of raising property taxes, he would support the tolling the Don Valley Parkway and the Gardiner Expressway. The money collected from these tolls would be dedicated towards transit. But, the province said no.

In addition to denying Toronto the ability to make money off of their own roads, the province said they would not be putting any new money into municipal projects for two years. This is a big blow to Toronto and an obvious election tactic on behalf of the Kathleen Wynne government in hopes of gaining support from the 905 communities.

What the province is forgetting is the universal benefits of a relief line. Those living in the 905 area may be able to get into the GTA thanks to the subway extensions and rail lines, but once they get here they will be trapped in the same congestion and gridlock as the rest of us. Revenue tools like tolls would be the perfect solution — drivers will pay to help support transit infrastructure so that those who do use public transportation get better service. Those drivers will then experience less congestion on major roadways.

It’s a win-win; or it would have been if the province approved it.

Without these revenue tools or financial support from both provincial and federal governments, the chances of the relief line being built by 2031 is incredibly low. Toronto needs the province to step up and put politics aside.

If the province won’t let us toll roads, then they have to give us funding for the relief line. Toronto’s mayor shouldn’t have to stand at subway station handing out leaflets to get the government’s attention, only to be scolded by the Minister of Transportation for doing his job. This project is too important for such silly and juvenile politics.

Toronto has waited about 100 years for the relief line. Do we need to wait another 100 before someone decides to be an adult and pay for this thing?

Politics March 22, 2017

Green Party hopes to woo voters with honesty and revenue tools

The Ontario Green Party is working on a comprehensive revenue tool package that will help fund infrastructure and transit projects throughout the province. The package will include a plethora of options for drivers and transit users, including the use of tolls and congestion charges in addition to uploading the cost of maintaining and operating the Don Valley Parkway and the Gardiner Express back to the province.

“One of the biggest challenges facing the GTHA is gridlock,” says party leader Mike Schreiner. “It affects our economy to the tune of $6 billion in lost productivity.”

According to Schreiner, the Green Party is willing to do something other political parties are not — explain honestly and openly what it will take to improve transit and quality of life in cities across Ontario.

“This is a situation where political self-interest is trumping the people’s interest,” he says. “There is a myth that somehow all this infrastructure is going to be built. Imagine if our great grandparents hadn’t paid for dams in Niagara Falls that generates electricity … or hadn’t agreed to pay for the cost of the 400 series highways that enabled us to ship goods to province and the US. It’s time for our generation to step up to plate and fund transit infrastructure desperately needed.”

As part of this plan, the Green Party is supporting dynamic tolling, where drivers are charged a larger cost for using certain roadways like the Gardiner and DVP during on-peak hours and less (or not at all) during off-peak hours. The hope is that this will encourage those who can use transit, to do so, and those who must drive, to carpool.

“A toll taxes people regardless of time of day when real problem is rush hour,” says Tim Grant, Green Party shadow cabinet minister for transportation. “The dynamic road pricing – although it sounds harsh at first glance – is really fair and equitable. It acknowledges that there is a higher cost to discourage drivers in rush hours.”

The money collected from these tolls would be dedicated to transit, ensuring that those who choose to use alternative modes of transportation are able to use a modern and well-maintained system. It’s a win-win scenario — the challenge is to convince people the long-term benefits are worth the cost.

“If you reduce traffic congestion, people have a higher quality of life,” Grant says. “Air pollution is reduced, fuel economy is reduced, which leads to higher air quality and more time on [drivers] hands.”

Grant says the problem with the current funding provided by both the provincial and federal governments to municipalities for infrastructures is that it only pays for the initial planning and construction of a transit project, but not to operate or maintain it. This results in poorer service and low ridership.

Another aspect of the Green Party’s revenue plan is to upload the costs of operating and maintaining the DVP and Gardiner Expressway back to the province, something that was promised over 10 years ago. This would free up a couple billion dollars worth of funding the City of Toronto could use to build better transit infrastructure and maintain other roads within the city.

The key, both Schreiner and Grant say, is to actually listen to experts and communicate that information honestly to the public, without political agenda.

“Part of the problem is that political parties prepare their platform and policies based on a calculation of what voters think – and it’s a sad state because the alternative is for a political leader to go out and be honest and say, you won’t like this, but you will love it afterwards,” Grant said. “It needs political leadership willing to get out in front of all this and say we are doing this because people will get to work faster, kids will have better transit, and this will be a benefit. Vote for me or not – but I will try to make life better.”

The Green Party will discuss their platform and comprehensive revenue package in May in preparation for the 2018 election.

Toronto December 11, 2016

What’s the deal with Toronto’s revenue tools?

The City of Toronto is facing a budgeting crisis with over $91 million worth of funds to find by City Council. Several revenue tools were presented by city manager, Peter Wallace in an effort to find money to fill the gaps and pay for all of the projects that are much-needed in Toronto.

Terms like ‘property tax’, ‘municipal land transfer tax’, ‘parking levy’, and ‘expressway tolls’ , are being thrown around like crazy, and it is easy to get lost in the world of financial terms. Understanding the inner-workings of the various revenue tools is the best way to decide which financial tools should be adopted by the city and which of them should be discarded. That’s why Women’s Post has created this guide, to help our readers understand the ins and outs of the revenue tools presented in the executive committee, and what terms will be flying around next week at city council.

Property Tax

Property tax is a commonly used revenue tool and is most often brought up in city council. A property tax is a levy on a property the owner is required to pay. It is set by the governing authority of any given area, which in this case is the municipality of Toronto. Property taxes in Toronto are a hotly contested issue because Toronto property tax rates are the only metropolitan tax that is lower than the surrounding area, the GTHA, and politicians don’t want to raise them. The city has proposed a two per cent property tax hike, but Toronto Mayor John Tory vows to raise the property tax no higher than half a per cent. Instead he is pushing for alternatives instead of pushing more tax on property owners.

Municipal Land Transfer Tax

Municipal land transfer tax has been a popular option for Toronto in the last year and helped keep the property tax inflation rate at bay in last year’s budget. The municipal land transfer tax is a fee that is paid by the person who purchases the home to the municipality that is charging it. There are rebates for first-time home buyers and other jurisdictions, such as Vancouver, have imposed a foreign land transfer tax to help lower inflation in the real estate market. It is a useful tool, but was used in the 2016 budget so may not be a viable option when looking at other options for 2017. City Council will discuss harmonizing the Ontario land transfer tax with the municipal option, which would require legislative changes but would streamline the process in the long-run.

Personal Vehicle Tax

The personal vehicle tax has been a revenue tool that was presented in the past before at City Council and was not a popular option. Council will consider the re-introduction to tax $120 per vehicle annually, but Tory has stated he is not a big fan of this option. The rejection of the personal vehicle tax has angered environmental groups who want to see people choosing to drive vehicles in the city pay extra taxes. The personal vehicle tax is also an easy and quick tax to implement because it doesn’t require any extra infrastructure.

Hotel Tax

The hotel tax revenue tool is being hotly contested by the tourism and hotel industry, which has already seen slowed growth due to the increasing popularity of air bnbs and other short-term stays. By placing an extra tax on the hotel industry, it may put more pressure on hotels to pay when they can’t afford to do so. Tory rebutted in the executive committee though that the annual subsidy supplied to hotels would help pay for the hotel tax if it were approved. This revenue tool would require provincial legislative and regulatory reforms, and is not a popular option in regards to fairness, efficiency, and is low in revenue quality according to Wallace’s presentation.

Expressway Tolls

Expressway tolls are the newest revenue tool to be introduced by Mayor Tory and is a popular option. The expressway tolls would require vehicles to pay a fee when they use the Don Valley Parkway and the Gardiner Expressway. If the city charged $2 per trip, the annual revenue would be $166 million per year. The start-up cost to build the expressway tolls would be an estimated $100-$150 million and have ongoing operational costs of $50 to $60 million. The expressway tolls would require provincial legislative changes, but could be implemented in the 2017 budget. City Council will be focusing heavily on tolls next week.

There are many other revenue tools that were presented including an alcohol beverage tax, a parking levy, a third party sign tax, graduated residential property taxes, and a municipal sales tax. From the climate of the executive committee meeting, it would be surprising to see any of these options be approved. They have not been given the same amount of attention as the hotel tax and expressway tolls. A graduated residential property tax and a municipal sales tax in particular require provincial legislation changes and were listed by Wallace as aspirational changes to be further discussed in 2018.

In order to fully grasp the many revenue tool terms that will fly around at City Council next week, focus on the most important options that are available. Also remember to bring popcorn. Even though discussing financial tools can be a bit of a bore, City Council is sure to get lively when discussing the various revenue tools that were presented for debate.

#TOpoli December 2, 2016

Executive Committee gets a toll awakening

Toronto’s city councillors got a rude awakening at Thursday’s lengthy Executive Committee meeting. City staff gave a presentation on revenue tolls, saying that it is necessary that council approve at least a few of their reforms — increase property taxes, sales taxes, vehicle tax, or user fees like tolls and public transportation fares. If they didn’t, well, they would have to find more cuts.

Toronto currently has $33 billion worth of unfunded projects. As city manager Peter Wallace said during his presentation, if executive council or city council decides not to approve the use of tolls or increase property taxes, then they better be ready to propose reductions in the capital spending.

“Toronto, a $12 billion enterprise, does require a long term, vigorous, and consistent framework,” he said. “Cutting costs on an annual basis doesn’t work long-term. Toronto needs a long-term investment and revenue strategy.”

Wallace spoke candidly about the need to choose, and implement, a revenue plan. If city council is not willing to increase taxes, then tolls are the only option.

Mayor John Tory announced last week that he would be supporting the implementation of tolls as a source of revenue for infrastructure and transit-related projects. His proposal: a $2 flat-rate toll on the Don Valley Parkway and the Gardiner Expressway. With this toll, the city would accumulate approximately $166 million in extra revenue. If the rate were to increase to $3.90, comparable to the cost of a transit fare, the city would make $272 million.

“If you want to live in a city in five or 10 years that is so much worse for congestion, then we shouldn’t have this discussion,” Tory said at a press conference prior to the vote. “But I’m not prepared to be that kind of mayor and when most people think about it, they know we need to build the transit and they know it isn’t free.”

“If anyone is opposed to road tolls, they have an obligation to tell us what they would do instead.”

There seemed to be a lot of differing opinions, but at the end of the day, the executive council saw the light and voted to send the toll proposal to city council for further consideration. The fees/cost of toll implementation will be decided at that point. Executive Committee also voted to ask the province for permission to impose a hotel and short-term accommodation rental tax and an alcohol tax. Council is still adamant not to increase property taxes by more than half a percent.

Tolling Toronto’s major roadways has a lot of benefits, and as was proven by the Mainstreet Research poll conducted last week, most of Toronto’s residents are comfortable paying a fee to use the DVP and Gardiner. The hope is that tolls will not only collect the much-needed revenue to build more transit, but it will also alleviate congestion and gridlock by encouraging car pooling and transit usage.

At the same time, the revenue tool discussion is always a hard one to have. An election is forthcoming, and no city councillor, not to mention mayoral candidate, wants to be the person to say “hey, we are raising taxes and we are making you pay to drive to work.” Toronto’s current mayor seems to have put the politics of re-election aside and was brave enough to push forward a proposal that may not be all that popular among his fellow councillors. And for that, Women’s Post commends him.

All I can say is that I hope the rest of council realizes that Toronto is in a pickle. The city needs money and it needs to build transit and infrastructure. The reality is that you can’t do one without the other.

#TOpoli November 28, 2016

New Mainstreet Research poll shows Toronto crazy for tolls

There has been a lot of criticism following Toronto Mayor John Tory’s new proposal to toll the Gardiner Expressway and the Don Valley Parkway. But, what do Torontonians really think? A recent poll published by the Transit Alliance, a non-political organization that works with people in the transit and infrastructure industry, shows that over 50 per cent of Toronto residents actually support the use of tolls.

The poll, which was conducted by Mainstreet Research on Nov. 25, surveyed residents from all 44 wards in Toronto to find out if they supported tolling major roadways to pay for infrastructure and transit. What they found was an overwhelming endorsement of the mayor’s proposal. Sixty-five per cent of Toronto respondents said that tolls were the preferred source of revenue compared to increasing property taxes or introducing a sales tax.

This statistic was further broken down into regions: 72 per cent in the downtown core, 64 per cent in North York, 62 per cent in Scarborough, and 57 per cent in Etobicoke.

When asked specifically about tolls, respondents across the board said they would be supportive of implementing them on the DVP and Gardiner.

The question was: “Proponents of road tolls for the Don Valley Parkway and the Gardiner Expressway say road tolls would force non-city of Toronto residents to pay their fare share; critics say road tolls are an unnecessary tax hike. Do you approve or disapprove of introducing tolls on the DVP and Gardiner Expressway to pay for transit and infrastructure?

Support for tolls was the highest among downtown residents, with 70 per cent of respondents approving — including 52 per cent strongly approving — of the revenue sources. Residents of Etobicoke and Scarborough were less supportive of tolling, at 61 per cent and 68 per cent support respectively — still relatively high within the margins.

Only a third of Toronto residents approved the use of property tax increases, and even less supported the use of a sales tax (22 per cent).

While there are a number of critics that believe tolling to be an unfair tax on those living within the 905 region, this poll shows that even those living in Etobicoke understand the need to create revenue for better transit and infrastructure. The city needs to grow, and if the choices are between an increase in taxes or a toll on drivers, Toronto has made it clear that tolls are preferable.

If there is this much support throughout all the wards within the city, hopefully the mayor’s proposal will soar through council and Toronto can finally start to accumulate the funds it needs to continue developing transit and infrastructure throughout the GTHA.

Mainstreet Research surveyed a random sample of 2,280 Toronto residents, calling a mixture of landlines and cell phones. The poll has a margin of error of +/- 2.05 per cent.

#TOpoli November 25, 2016

Mayor John Tory right on the money with revenue tools

Toronto Mayor John Tory announced Thursday that he would be proposing the use of tolls and a hotel tax to create extra revenue for transit and infrastructure projects in the city. Prior to that announcement, a report was released by the Munk School at the University of Toronto indicating the need for a multi-tax system to pay for services. The conclusions of the report back up Tory’s decision to actively search for more revenue tools to help pay for the much-needed transit system being built in the city.

The report was written by Harry Kitchen, a professor in the economics department at Trent, and Enid Slack, director of the Institute on Municipal Finance and Governance and a professor at the Munk School of Global Affairs. They argue that property taxes, user fees, and transfers from other levels of governments have remained unchanged as large cities continue to grow and expand. This is unsustainable and larger cities in Canada must adapt.

The authors’ argue that decisions on public spending need to be linked with revenue decisions. This is what the mayor was trying to say in his speech on Thursday — that Toronto can’t afford to keep building and providing better service unless there is a way to pay for this growth.

The report also makes mention of services that benefit people across municipal boundaries like roads. While the report suggests transfer of responsibility to the province, sometimes that isn’t possible. Tolls, for example, would be a good compromise, allowing people who often travel into the city on a daily basis to contribute in a way besides property taxes.

In terms of the property tax, something Mayor Tory refuses to increase by more than half a per cent, the authors’ say it’s a good way to raise revenue for infrastructure, but that a mix of taxes is recommended. Property tax is also more expensive to administer compared to income or sales tax. “The property tax is relatively inelastic (it does not grow automatically as the economy grows), highly visible, and politically contentious,” the report reads. “It may therefore be insufficient to fund the complex and increasing demands on local governments.”

“A mix of taxes would give cities more flexibility to respond to local conditions such as changes in the economy, evolving demographics and expenditure needs, changes in the political climate, and other factors.”

The report suggests charging user fees for services as often as possible, as under-pricing can result in over-consumption. Tolls were specifically mentioned as an example of a user fee that can be used on a major highway or arterial road running into a big city. While high-occupancy tolls, which charges vehicles for using a specific lane, can be effective on big highways, it’s much more efficient to toll the entire roadway.

Revenue collected from the tolls in place on the 407 in 2011 earned the provincial government an extra $675 million. The proposal set forth by Tory indicated an extra $200 million in revenues with a $2 toll charge on the Gardiner Expressway and the Don Valley Parkway. The other benefit is that it will reduce congestion and unlock gridlock while creating funds that can be dedicated for transit.

Other options presented in the report include a parking charge, an increase in personal income and sales tax, a fuel tax, hotel tax, and vehicle registration fee. The conclusion seems to be by increasing/implementing a number of these revenue tools, it won’t affect a singular demographic to harshly while still generating funding for a large Canadian city to grow.

It looks like our mayor was right on the money, so to speak.

#TOpoli November 10, 2016

City council approves transit network plan

As a reporter, I love covering City Hall. But, sometimes it can get frustrating — for example, when it takes nine hours of discussion before a decision can be made surrounding a transit plan that has been on the table for over a year.

City Council voted Tuesday to go forward with the “motherlode” Transit Network Plan and approve a deal made with the province that will see them contribute approximately $11 billion towards transit. This includes $3.7 billion for Regional Express Rail (RER) and $7.84 billion for Light Rail Transit (LRT).

The problem? The city was not prepared to carry their weight of SmartTrack. This agreement would see the city contribute $3 billion of their own funding towards the project (or $2 billion if the federal government pitches in). Toronto will also be responsible for day-to-day-operations and maintenance of the Finch West, Sheppard East, and Eglinton Crosstown LRTs.

Mayor John Tory had to remind council a number of times that the deal with the province really does benefit the city, saying that if the province had meant to pay for everything, they would have had a parade and used it as an election campaign issue.

“The number one thing they want me to do is ease the strangulation that has taken place in this city as a result of traffic congestion and the number one way you can do that is build public transportation,” Tory said to reporters half way through the meeting.

This transit network has been a continuous source of political capital for city councillors, which is why staff divided the funding discussion into two parts in hopes of making the decision easier. During this particular council meeting, councillors were simply voting to approve the negotiations between the province and the city, and committing the city to continue their work. Staff will then return with the exact costs and details of construction for each project.

The second discussion will be about revenue tools — how exactly will Toronto pay for transit? Will they have to raise property taxes? Will they have to find cuts somewhere in the budget? This discussion will happen in December or January and is sure to be just as lengthy, if not more so.

However, this did not stop a number of councillors from using this time to try and amend the motion to squeeze as much as possible out of the province. Staff warned that by delaying the provincial negotiations, it could result in the province completely reneging on the agreement. As City Manager David Wallace pointed out, Toronto needs to make an investment and they need to do it now.

There were a number of councillors who were concerned about making that investment, saying that approving a plan before knowing how the city was going to pay for it was irresponsible. While I can admire their tenacity and commitment to the budget, city staff, as well as the Toronto Transit Commission, have reached an agreement that appears to be quite fair. By continuing to delay the building and construction of necessary transit systems, council will ultimately ruin all the hard work city staff have put into building an integrated transit network to begin with.

The solution seems simple: instead of complaining, be creative and start to come up with ways of creating revenue without raising property taxes to the extreme. I’ve previously suggested the use of tolls, something I firmly believe would help raise the much-needed revenue for transit. Not only would it unlock gridlock on our congested roads, but the money could be earmarked for SmartTrack specifically!

Toronto NEEDS transit, and if at all possible, it would be great if part of it was finished in my lifetime. Let’s stop the bickering and start to think of real solutions to the city’s gridlock problems.

Featured January 13, 2015

Extreme cold shuts down too many streetcars

By Sarah Thomson

With 28 street cars pulled out of service Tuesday afternoon and Wednesday morning due to extreme cold a question many should be asking, is what will happen as global warming causes more extreme weather conditions for Toronto? Ice storms and snow storms also play havoc with above ground transit. The T.T.C. has announced they’ll have busses runnng to fill in where they can -502 Dowtown, 503 Kingston Road & 511 Bathurst – check transit app to get updated times.

Major cities around the world invest in underground transit. With the extreme weather predicted for Toronto’s long-term future, it makes the larger investment today all the more reasonable. Toronto must begin to look at transit planning through a bigger lens than merely cost. The last time Toronto’s subway shut down fully was during the July 2013 flood when all major highways and transit in the city was shut down for a few hours at the height of the flood.

The subway system has proven over the years to be the most reliable system through the winter months, but we have to invest in it. It is an aging system in need of significant upgrades and investment, and remarkably small system given the growth of Toronto ove the past two decades.

The downtown relief line running under Queen Street and joining up with Eglinton Street at either end is still the most important subway line that Toronto needs to build. Unfortunately political maneuvering continues to stall it’s progress. With so few politicians willing to stand up for the dedicated transit that is needed to fund such a project.

While Mayor Tory announced his Smart Track as an alternative for the downtown relief line, the truth is that it too will suffer from the increasing extreme weather conditions (primarily winter conditions) that Toronto is expecting over the next few decades. And while his Tax Increment Financing (TIF) may have seemed the perfect solution to transit funding during the election, it was merely a strategy for borrowing and it does not actually raise funding, but merely works as security for a loan. And unfortunately it will leave future generations forced to pay it back.

Personally I believe Mayor Tory knows that Tax Increment Financing is nothing more than a strategic campaign platform, it is not a funding tool but a financing strategy that has worked on small projects across North America. He still has a lot more work to do when it comes to supporting the basket of revenue tools – increase in development fees, parking levies, sales taxes or tolls – that he has advocated for over the years.

But for some reason, with Tory at the helm, I can imagine a time when Toronto decides to invest in itself, when revenue tools have been put in place to generate funds that we can invest into our transit system. Add in a Federal transit funding strategy to the provincial and municipal funds and then our City will have a real choice – invest in below ground subway or cheaper above ground rail that continually shuts down during extreme weather conditions? If the funding is there Toronto will build subways because they are a better long-term investment.

It’s time for Mayor Tory to get started on securing the dedicated transit funding tools that he’s advocated for over the past few years. He’ll need all the help he can get, and each one of us can play a part in convincing our neighbours to support dedicated transit funding.

A courageous man once said “If anyone tells you that Toronto does not need revenue tools for transit, they aren’t being honest.” It’s time again for that man to show courage.