Archived columns and blog posts by Matt Elliott

Rob Ford and the enduring myth of the 'dreaded car tax'

By: Metro Canada Published on Wed Aug 13 2014

Aside from the bit where he said that transit isn’t important for people without jobs, Mayor Rob Ford’s campaign speech yesterday was largely a rehash of well-worn, dubious talking points.

He also worked very hard at jogging public memory about the $60 vehicle registration tax, which existed for a couple of years before Ford convinced council to kill it after he took office. He’s even started referring to it as the “dreaded car tax.”

“Let me go back to the dreaded car tax, which had to be — had to be! — put in, or our roads would crumble. I think those were the words of my previous predecessor,” he said in his speech, before pointing out that Toronto’s roads have not, in fact, crumbled.

He later returned to the subject again: “Remember the car tax?” he asked rhetorically. “Yeah, I think I mentioned the car tax. I gotta get rid of the car tax. We got rid of the car tax! We do not need the car tax.”

The intent and implication seems obvious. Before Rob Ford took office, the narrative goes, the city had taxes like the car tax. Now, with Rob Ford in office, there is no car tax. Ergo: Rob Ford is a good guy and should be re-elected.

But I take issue with that, and with the myths that surrounded the vehicle registration tax.

To hear some tell it, the VRT was both an incredibly onerous and unfair tax. Apparently, it was also so political challenging to get rid of that Ford was the only person who could do it.

The VRT was hardly an onerous tax by any definition. It was a charge of five dollars per month, per car. Ford likes to talk about how cutting the tax created jobs, but it’s unclear that jobs can meaningfully created by individuals having an extra $60 or $120 per year. If you invested the tax's aggregate revenue into infrastructure construction, on the other hand, that would probably create a few jobs.

If we’re to accept that an extra $60 extra per is a weighty tax burden, then what do you call the $153 extra per year TTC Metropass holders have had to absorb via fare increases since 2010? By Ford's logic, think of all the jobs that could have been created if we had frozen that cost.

As for fairness, it’s easy to point to the idea that the VRT was unfair because people who lived outside the 416 boundaries didn’t have to pay it, but that sort of argument never holds much sway with me.

The fact always remains that Toronto homeowners pay the lowest property tax in the GTA, both in terms of percentage and in terms of real dollars. Fairness is a two-way street.

That said, I’d be reluctant to embrace a return of the VRT because it was a pretty unimpressive revenue generator, especially compared to the cash cow that is the land transfer tax. The VRT brought in $48 million in 2010 — the approximate equivalent of a two per cent increase in revenue from residential property taxes. Given how much of a political lightning rod it became, it seems like less of a hassle to collect that revenue through the property tax base.

Which brings us to the biggest problem with Ford’s invoking of the dreaded car tax: he was not the only one with the will and the means to scrap it.

Here’s a quote from a candidate who opposed Ford in 2010: “The rift created between residents and city government by the vehicle registration tax is not worth its relatively small revenue. I will phase it out.”

That wasn’t some conservative longshot contender speaking. It was noted left-wing longshot Joe Pantalone.

And what about this quote on the vehicle registration tax from second-place finisher George Smitherman way back in February of 2010?

“I think it is one of those things that is a little bit like the straw that broke the camel's back, and elicits from so many people this feeling that they have been nickel and dimed…I know that the fiscal construct is hard around the city, but I'm going to do the heavy lifting and put the circle around that one as something that I would like to try to lead to reduction or elimination.”

Smitherman was talking about getting rid of the VRT before Ford even registered to run.

In other words, there’s good reason to think that dreaded car tax — which really shouldn’t have been so dreaded, but whatever — would have been partially or completely phased out even if Ford had never become mayor.

Perhaps that point should make even the most ardent tax-hating conservative wonder if electing Rob Ford — and all that he brought with him — was really worth it.

This post was originally published at on 2014-08-13T00:00:00.000Z

About the author

Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
Website / Twitter / Email Archived columns and blog posts by Matt Elliott


Follow Me on Twitter

Recent Posts

Recent Comments