TORONTO - City Hall is diving into a debate over new taxes — whether Mayor John Tory wants it or not.
Councillor Shelley Carroll said she wants council to give city staff direction to negotiate with the province to beef up Toronto’s revenue toolbox with additional options like a sales tax and an income tax. Carroll also thinks it is time that the city looks at bringing back the car tax.
The Don Valley East (Ward 33) councillor said she is prepared to push for another revenue tools debate this year despite the fact council rejected a laundry list of transit revenue tools last term.
“I think we’ve got to look at sales tax again and, whether people like it or not, if they don’t like the TTC fares we have to revisit the vehicle registration tax, just have to,” Carroll said Friday. “This city has to look at sales tax and income tax.”
A member of the budget committee, Carroll said the city must examine “all the revenue tools in the City of Toronto Act plus” now that it no longer has the province as a partner for social housing.
Asked what happens if Tory’s executive committee buries the debate, Carroll was blunt.
“This is going to be kind of a really difficult place to do business in,” she said.
Amanda Galbraith, Tory’s spokesman, was quick to distance the mayor from any talk of a revenue tools revival.
“The mayor is on record saying no to the vehicle registration tax,” Galbraith said. “The city has no powers to institute a sales tax and we have no plans to do either.”
City Manager Joe Pennachetti said he believes council has to give staff “clear, strong direction” to talk to the province about making additional revenue tools available under the City of Toronto Act.
The city is about to sit down with Queen’s Park to review the five-year old act that does give the city some revenue powers including the ability to implement the municipal land transfer tax and a car tax.
“We do want to talk about future revenue tools — many councillors want to revisit that,” Pennachetti said. “To add larger taxes like sales tax, we would need strong support from council.”
Pennachetti maintained he thinks the city needs sales tax revenue.
“We are probably the only city of three million residents and more in the world that funds all of its services from property taxes — there is no sales tax, no income tax, etc.,” he said. “There has to be change at some point in time in order for us to get through all of the growing pressures we have from transit to housing to all the social services we now have to fund from property taxes. From my viewpoint, maybe not tomorrow but in the long term we need sales tax.”
Councillor Rob Ford ripped the idea of a city sales tax and income tax or bringing back the car tax.
“Absolutely ridiculous ... crazy in the head,” Ford said.
Budget Chief Gary Crawford came out firmly against a city sales tax or income tax.
“I’m not supportive of raising any taxes at this point,” Crawford said.
Councillor James Pasternak balked at imposing any revenue tools that impacted city residents.
“We need revenue tools that affect the non-residents of the city — tolls that affect non-residents and maybe a hotel tax,” Pasternak said. “City of Toronto residents can’t endure added costs and the revenue tools that we’d be looking at budget committee are those that would be applied to non-residents.”