Toronto exploring municipal sales tax to fill $1.5 billion budget gap. What else is on the table?

The City of Toronto has passed a few new revenue tools to raise some money it needs right now, but it will require a much bigger toolbox to help make ends meet.

After a marathon session last night, Toronto’s city council is now embracing 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.

It’s one of several revenue tools passed and to be explored with more tough budget decisions on the horizon.

“I was very encouraged that there was a vigorous discussion. It was a unanimous agreement that we as a city need revenue tools to grow the economy,” Toronto Mayor Olivia Chow said on Thursday.

The city manager’s report was put before councillors Wednesday at a special meeting where they met 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.

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

More taxes on goods and services is now a suggested option from City Hall, but that would need the province’s go-ahead first, and so far, Premier Doug Ford hasn’t been receptive.

“We all pay HST. Maybe one cent of it can come back to the City of Toronto,” Chow added.

Toronto Mayor Olivia Chow is photographed during a press conference following a tour of Revivaltime Tabernacle Church, where African and Black refugees and asylum seekers received emergency shelter, in North York, Ont., on Friday, July 28, 2023. THE CANADIAN PRESS/ Tijana Martin

Asking for a portion of the HST would involve Toronto being given a slice of revenue, already making its way to the provincial and federal governments. 

“It’s really a case for exceptionalism. I can’t see either one government going for a policy decision that helps only one city in the province,” said Wayne Petrozzi, Professor Emeritus of Politics and Public Administration at Toronto Metropolitan University.

When asked about the city’s decision to vote in favour of implementing new revenue tools, Ontario’s Minister of Municipal Affairs and Housing, Paul Calandra, chose not to answer.

City councillor Shelley Carroll (Don Valley North) was asked what the city could do based on the few revenue tools available.

“We have a lot in common with our provincial partners. They’re saying in terms of this conversation, affordability is our issue,” Carroll said.

Some new ideas that city council asked to be looked at by staff include a municipal lottery and levy for passengers using Billy Bishop Airport and saving money by trying to get the province to maintain the Gardiner Expressway and Don Valley Parkway.