Toronto city council votes in favour of new revenue tools. Here’s what comes next

City council debate continued Wednesday evening attempting to address Toronto’s more than $1-billion budget shortfall. David Zura with the revenue streams up for consideration.

A special session at Toronto’s City Hall has ended, and councillors voted on what they thought were the best solutions to fill a more than $1 billion budget hole.

After years of consideration, Toronto’s city council is embracing the possibility of revenue tools, such as taxes and fees. Among them are increases to the municipal land transfer tax on luxury homes worth $3 million or more and the removal of a $5-per-hour cap for street parking.

Other options, like a commercial parking levy and asking the province to bring in a Toronto-specific municipal sales tax, would be explored further by city staff before being considered by council.

“We need to be courageous,” said Toronto Mayor Olivia Chow. “We need to say, ‘OK, we have to do this.’ Take a deep breath. We have to deal with our budget deficit.”

The city is asking the Ford government to either implement a 1 per cent sales tax or give the city 1 per cent of the existing HST, either of which would generate up to $1 billion a year.

RELATED: Toronto proposing higher taxes, parking fees in face of massive shortfall

The city manager’s report was put before councillors Wednesday at a special meeting where they were set to discuss how to manage Toronto’s beleaguered financial outlook, with the city set to open its 2024 budget discussions with a $1.5 billion shortfall.

The city is facing a combined operating and capital pressure of $46.5 billion in its budget over the next decade, according to the report.

“With the magnitude of the financial pressures the city faces over the next decade, there really is no one single solution that can address the city’s financial challenges,” said Interim Chief Financial Officer Stephen Conforti. “Staff are recommending a series of options that can collectively mitigate the financial pressures.”

Olivia Chow

Olivia Chow makes her way to a press conference following her Declaration of Office Ceremony at Toronto City Hall on Wednesday, July 12, 2023. THE CANADIAN PRESS/ Tijana Martin

Chow says the refugee shelter crisis is only getting more urgent because the city doesn’t have the financial tools to support claimants.

“We are a billion dollars already in the budget hole,” Chow said in a speech before council on Wednesday. “How are we going to be able to support these refugees properly?”

“Will they be on the street come winter? I don’t know. We cannot answer that question. Our staff cannot answer that question. That question depends on whether the federal government will step up and do what it needs to do and not shirk its responsibility.”

The report before city councillors says the number of refugee claimants has “dramatically” increased to 3,300 people and could climb by year’s end to as many as 4,500 — half the city’s shelter capacity.

With files from The Canadian Press

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