There’s been a bunch of talk during Toronto’s mayoral race about tax increment financing, or TIF.
TIF is the complicated mechanism that’s supposed to fund candidate John Tory’s SmartTrack plan, and potentially Mayor Rob Ford’s subway-mania idea. But despite the campaign promises, TIF is an unproven funding source in Toronto.
I’ve got an alternative idea. Instead of talking about funding transit with TIF, maybe we should be talking about funding transit with TIFF.
Yeah, the Toronto International Film Festival. Maybe it, and events like it, should be a part of what drives funding for Toronto transit expansion.
Despite grumblings about increased traffic, most people recognize that TIFF, like Pride, Caribana and the Honda Indy, is good for Toronto because it boosts local business. Hotels are booked solid, restaurants are always busy and people who rent out red carpets live like kings.
But the problem for Toronto’s government is, aside from some permit fees, that this increased economic activity translates into virtually no new revenue for city hall. Instead, the tax windfall from events such as TIFF comes through our harmonized sales tax — money that goes straight to the provincial and federal government, who generally don’t spend it in Toronto.
It’s time to change that. Toronto needs to look at getting its own share of the pie. Toronto needs to look at implementing a municipal sales tax.
I’ll acknowledge that saying this probably makes me history’s greatest monster in the eyes of a lot of people, but the rationale for a city sales tax is strong and getting stronger. This isn’t just some crazy left-wing idea.
Retiring Toronto city manager Joe Pennachetti — hardly a hippie — spent years advancing the idea that the city needs a revenue source that grows with the local economy, like a sales tax. It’s something that virtually every developed big city around the world has.
A sales tax would flip the script on Toronto’s budgets. For fiscal conservatives, the estimated $500 million per year that a one per cent city sales tax would bring in could ensure Toronto maintains its status as offering the lowest property taxes in the GTA years to come.
It would also create a real revenue incentive for local politicians to support cultural events across the city.
And, of course, it would give city a real, proven, no-fooling opportunity to create a dedicated fund for transit.
Sure, there are barriers. For starters, city hall would need to get provincial assent to even start talking about this kind of tax.
But with so much talk of unproven and risky transit financing schemes this mayoral election, I’d argue that it’s time to at least have the conversation about whether those TIFF red carpets could be a reliable way to help fund the Red Rocket.
This post was originally published at http://www.metronews.ca/views/toronto/urban-compass-matt-elliott/2014/09/07/why-we-should-be-looking-to-tiff-to-fund-torontos-transit.html on 2014-09-08T00:00:00.000Z
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