Impose sales tax to pay for Toronto subways: Councillor

Item date: 
February 23, 2012
Item context: 

City of Toronto Councillors are now throwing out all sorts of revenue tools to pay for transit. Here they discuss a sales tax (which is a very regressive policy as it hits low income folks the most) as well as parking levies and vehicle registration fees.

By DON PEAT

TORONTO - Toronto should impose a dedicated sales tax to help rocket subway construction, says Councillor Norm Kelly.

The Scarborough councillor believes Mayor Rob Ford could find a way to inject cash into his subway dreams by getting the city to ask the province for a 0.5% sales tax.

He estimates the tax would generate around $250 million a year — money he says would solely go towards subway construction.

“I think it is the fairest tax,” Kelly told the Sun Thursday. “Every buck would go into subways, every dollar, it would be a special fund, it would not go into general revenue.”

The veteran councillor and TTC commissioner argued a sales tax would be paid by anyone buying goods or services in the city — hitting Toronto residents but also 905ers, tourists and anyone else not paying property taxes.

“It spreads the tax base out and captures people right now who don’t make a contribution to the running of the city,” he said.

Kelly’s subway sales tax idea comes the same day Mayor Rob Ford suggested in a national newspaper op-ed that a “modest parking levy” could help the city “start building subways now”. Ford argued the levy would generate more than $90-million annually and fund a public-private partnership to build the Sheppard subway.

Kelly said a sales tax would be a “decisive, bold, statesman-like move”, but it would end the debate about the city’s rapid transit future.

“It’ll be subways and you’ll have the money to pay for it,” he said...

Budget Chief Mike Del Grande said he is concerned the amount of the subway sales tax could creep up over time and become lost in general revenue.

“I don’t like taxes for the sake of taxes however a sales tax would capture everybody and anybody that comes into the city,” he said...

“The big question for Mayor Ford and what he needed to answer is how is he going to get his financing? It appears he is now wrestling with that question,” Councillor and TTC Chair Karen Stintz said.

Councillor Adam Vaughan accused Ford of “making numbers up” when it comes to the parking levy.

“If he is prepared to bring a car tax forward, I’ll look at it and see what it does to help us build the right kind of transportation,” Vaughan said.

Vaughan said his position on what transit to build in the city stays the same.

“I believe that the plan council passed is the best plan for the city,” he said.