Ford and His Allies Discover Good Taxes


As part of his campaign to convince all Torontonians to embrace subways, mayor Rob Ford wrote up an interesting article in Thursday’s Globe and Mail. In it, he started to lay down some concrete proposals on how he could pay for his subway vision. To whit:

According to KPMG, a modest parking levy could generate more than $90-million annually. That would fund a public-private partnership model to build the Sheppard subway and generate ongoing revenue for future subway expansion.


Before I go further, there is some snark that I need to get out of my system, so I hope you will forgive me when I say, “a modest parking fee can generate more than $90 million each year? You know what else could generate around that much each year? The vehicle registration tax that you canned in 2011!”

But that aside, I do greatly appreciate mayor Ford’s willingness to consider new taxes to pay for his subway vision. I have always said that I have nothing against installing subways where the numbers warrant, if there is a credible plan to pay for them. I am sorely tempted to finish the Sheppard subway, even though one could call that throwing good money after bad. I certainly believe that we need a Downtown Relief line built as a subway, but that won’t happen unless money comes from somewhere.

And I greatly appreciate that Rob Ford has basically admitted that Toronto doesn’t have a spending problem, it really, honestly has a revenue problem. The gravy train that he claimed could be stopped, lowering taxes without “major” cuts to services, simply didn’t exist.

My earlier snark aside, maybe a parking fee would work. It might be more universal than a vehicle registration tax, meaning that drivers from outside the city will pay it instead of just city residents, as is the case with a vehicle registration tax, so that might be fairer. But Ford doesn’t say how much of a fee would be required to raise $90 million, and that amount won’t get you more than a 333 metres of subway tunnel. Ford’s appointee, Gordon Chong, has shown that developers aren’t lining up to take the big risk of building new subways without considerable subsidy and, really, what would such a public-private partnership result in? If a developer builds a subway line and leases it back to the city, all the city has done is gotten a private construction company to give the City of Toronto a multi-year mortgage on a major asset, paying a little year-to-year, but paying more over the long term. Might it not be better just to spend the money up front, tender out the construction in as open a process as possible and own the thing yourself?

Personally, I prefer councillor Norm Kelly’s suggestion of introducing a 0.5% Toronto-only sales tax to raise the funds. That’s a wider tax base, and more likely to bring in the revenues needed to make these transit plans a reality. My suggestion to him would be to petition to raise the HST from 13% to 13.5%. We already have the tax framework already in place, so just flip a switch or two on it, and save yourself the administration costs of a new tax.

But it is good that we are talking about this. Ford has at least opened the door to raising taxes in order to pay for new infrastructure, and this is an opportunity for valuable leadership. Now, let us actually have a honest to goodness talk about what projects are appropriate for what corridors. Let’s ground this discussion in facts, consider ridership numbers, disruption, future development, all of it. Ford’s given us a little bit of movement, but it remains to be seen if he’s open to having his proposed funding mechanism applied to, say, LRTs where demand warrants, or a Downtown Relief subway line.

blog comments powered by Disqus