Two of the city’s most fiscally conservative councillors stood up in the council chamber on Tuesday and made the case for significantly raising property taxes.
One was Mayor John Tory’s budget chief, Coun. Gary Crawford (Ward 20 Scarborough Southwest), the other his deputy mayor.
“I am supporting the mayor’s initiatives. He has a mandate to move forward with two particular items, housing . . . and transit and I recognize that those things can’t be fully funded with the resources that we have,” said Deputy Mayor Denzil Minnan-Wong (Ward 16 Don Valley East).
It was what one councillor said he hoped was a “turning point” in the city’s history when it comes to talking about taxes. It comes at the end of a decade that saw incredible turmoil during the era of former mayor Rob Ford, who declared there was a “gravy train” at city hall waiting to be found and led a decline in the amount the city spends on its residents.
At Tory’s urging Tuesday, council voted 21 to 3 to increase taxes by eight per cent over the next six years in order to pay for unfunded transit and housing projects. Councillors Michael Ford (Ward 1 Etobicoke North), Stephen Holyday (Ward 2 Etobicoke Centre) and Anthony Perruzza (Ward 7 Humber River—Black Creek) voted against the increases.
Two councillors were absent. Coun. Jaye Robinson (Ward 15 Don Valley West) is currently undergoing treatment for cancer. Coun. James Pasternak (Ward 6 York Centre) was at council earlier in the morning, but was absent when the vote was taken.
The increased levy on property taxes will benefit what’s called the city building fund, first introduced by Tory in 2015.
The increases will allow the city to borrow $6.6 billion. Tory has said those funds will go toward the more than $20 billion backlog in TTC capital works and the $3 billion in city investments required under a new 10-year housing plan also set to be approved at council Tuesday.
Council agreed to an additional one per cent increase in 2020 and 2021 and a continuing 1.5 per cent increase every year through 2025.
When fully implemented in 2025, the increases will cost the average homeowner an additional $280 annually. With the originally-approved increases to the city building fund levy are considered, the total cost will be $326 in 2025. Business owners will also be taxed.
Even with the increases, Toronto will still have some of the lowest property taxes in the GTHA — a point emphasized by Ryerson University researchers in a followup to their recent comparative study of taxation in the region.
Assuming an additional two per cent increase to base property taxes, the team from the Centre for Urban Research and Land Development said in a blog post this week that the increase to the city building fund would “bring the city closer to the mid-range” in terms of average residential property taxes paid in dollars, but would leave city homeowners below the median for taxes as a percentage of market value or as a percentage of household income.
Though Tory has introduced a new tax measure during almost every year in his first term of office, he has done so claiming he won’t raise property taxes above the rate of inflation.
On Tuesday, he maintained that the increase to the base property tax rate, which substantially funds city operations, will be inflationary only — something council must agree to in the upcoming budget process for 2020. At the same time he said the increase to property taxes for the city building fund — which would put the total increase above inflation — was necessary.
Addressing negative comments he’s been receiving from the public since he announced the proposal, Tory drew on the advice of his political mentors and his late father. “You can never go wrong doing the right thing,” he said.
“I think people will say the city is moving in the right direction, however, they also understand the fact that we need to do some things to keep it moving in the right direction,” he said. “We have invested in previous years that I’ve been mayor, and we will again this year, a record amount in the Toronto Transit Commission, a record amount with new stable funding features for the Toronto Community Housing Corporation and so on. Is it enough to solve every problem? I’m not sure we can ever do enough.”
Coun. Gord Perks (Ward 4 Parkdale—High Park) framed what some have applauded the mayor for as a victory for those who have long rallied against Tory and his public stance on taxes.
“It is my hope, my wish actually, that today marks a turning point in the way Torontonians talk about the city that we build together. For, I don’t know, a decade, longer than that, we’ve had a toxic conversation about the shape of the City of Toronto,” Perks said. “Taxes are the price of living in Toronto. And yet, anyone who has said that in the last decade has been mocked, belittled, attacked, called names and generally been made to feel that they are doing something wrong.”
“Today is a victory. But it is a victory for all those people in the City of Toronto who have stood up to that abuse and mockery.”
He recalled the all-night debates and protests to save public services like transit and library hours which followed a KPMG core services review ordered under Ford’s watch at the start of the decade, back in 2011.
Those late-hours in a city hall committee room were marked by speeches like that of then 14-year-old Anika Tabovaradan, who sobbed audibly as she pleaded for her library to not close earlier.
“I’m no taxpayer,” the teen told Ford’s executive committee in 2011. “But when I get to use the computers in the library and do my homework, I’ll be able to get a good job someday . . . and when the day comes to pay taxes, I’ll be glad that you supported people paying the extra taxes to keep the system going.”
To her and others, Perks said Tuesday: “This is your day.”
Like the KPMG report before it, a new Ernst and Young review also debated Tuesday — and paid in part with funds from Premier Doug Ford’s offer to help with municipal audits in the wake of provincial budget cuts — found that the city cannot cut its way out of its financial woes.
“From an overall fiscal management perspective, analysis indicates that expenditure control alone is unlikely to fully address emerging fiscal risk,” the report said.
The report found that the city has spent $190 fewer dollars per person over the last four years, from $3,166 per capita in 2015 to $2,976 in 2018.
Council agreed Tuesday to receive that report for information. Tory has said he would like to see some of the efficiencies in procurement and other processes implemented starting in the 2020 budget. Other recommendations, including potentially privatizing child-care, he and city manager Chris Murray have said require further study.
Minnan-Wong’s speech on Tuesday didn’t end at his support for taxes. He continued to say there were efficiencies to be found, pointing to the Ernst and Young findings.
“This idea in the chamber that raising taxes is a virtue, I don’t share that virtue,” he said. “I think most of the public would like us to do our best to find efficiencies in the government.”
Jennifer Pagliaro is a Toronto-based reporter covering city hall and municipal politics. Follow her on Twitter: @jpags