Toronto City Council was full of surprises last week.
Not only did the final council meeting of 2016 see councillors vote to move forward with Mayor John Tory’s plan for highway tolls – something unthinkable just a year ago – they also took their first steps toward the creation of a municipal sales tax.
It’s almost like our perennially immature city is finally ready to grow up.
The sales tax decision is especially notable. Off a motion by Coun. Josh Matlow, councillors voted 30-12 to ask the provincial government for a city share of the HST. If that doesn’t work – and it probably won’t – they also voted 22-20 to explore the creation of a new sales tax for Toronto, potentially in coordination with other GTA municipalities.
This is huge.
There’s a strong case for implementing a city or regional sales tax. Unlike highway tolls, a sales tax could be implemented relatively quickly. While it would require provincial approval, it wouldn’t require any new equipment and the ongoing cost of collection is much lower.
I don’t mean to dump on road tolls. I’m not changing my tune — I still think they’re worth pursuing, and they might end up as the only feasible option.
Obviously, the revenue potential is enormous. A recent study by the Institute on Municipal Finance and Governance pegged the value of a one per cent tax at more than a half-billion a year.
That will buy you a lot of infrastructure.
But for me, what makes a sales tax desirable is less about cash and more about the way it could better direct the city’s political priorities.
Whether they know it or not, politicians are greatly influenced by the kind of taxes they collect. In Toronto – where property taxes and the land transfer tax rule the roost — this leads to an overwhelming political focus on homeownership and real estate.
A sales tax flips that around. Politicians would have a financial reason to care about things that generate consumer spending. The economic activity spurred by events like TIFF and Pride would directly contribute to building transit and housing.
But alas, in a move we’ve seen all too often, the provincial government was too quick to close the door on Toronto’s openness for a sales tax.
“It’s not something that, at this point, I’m willing to entertain,” said Finance Minister Charles Sousa after council’s vote.
That’s too bad, and I’m asking Queen’s Park to reconsider.
It is, after all, a season for giving.
Why not give Toronto the power it needs to be better?
This post was originally published at http://www.metronews.ca/views/toronto/torys-toronto-matt-elliott/2016/12/19/all-i-want-for-christmas-is-a-toronto-sales-tax.html on 2016-12-19T00:00:00.000Z