In a bid to address Toronto's perpetual budget struggles, city staff are exploring the idea of new taxes on parking, alcohol, cigarettes and entertainment.
The city's chief financial officer, Rob Rossini, told the budget committee on Thursday that staff are looking at a number of potential revenue tools – including new taxes – possible under the City of Toronto Act, to avoid the last-minute scramble the city faces each year to balance the budget. And even though Mayor John Tory dismissed the idea outright, Mr. Rossini said that staff are exploring the idea at their own initiative, so that councillors are aware of all their options.
"It doesn't mean that you're going to see a report tomorrow morning recommending X, Y or Z. It's something that's more for longer, medium-term planning," Mr. Rossini said. The city last looked at the idea of implementing the so-called "sin taxes" back in 2007.
"It's just a prudent thing to do – to look at all our options. It doesn't mean anything's going to happen."
As a cash-strapped province continues to download services onto the city, and with only the property tax and user fees to cover costs, the City of Toronto has continually struggled to find a way to balance the budget. For 2015, the city will have to find $333-million in order to make up for spending pressures, staff said on Thursday.
But even if staff do end up recommending any of these new taxes when they come back with their report next year, it will still have to be approved by council.
The mayor, meanwhile, responded immediately by saying he was against the idea.
"The mayor was clear during the election campaign we will keep taxes at or below the rate of inflation. Period. Full stop," said a statement from Tory spokeswoman Amanda Galbraith.
"The mayor is committed to keeping Toronto affordable. No, the mayor is not considering the use of any such taxes and fees."
Budget chief Gary Crawford also said he would not be in favour of the idea, but he added that staff are just doing their job in providing council with options for balancing the budget.
"No, of course not," he said when asked whether he would support new taxes.
However, he said that "I want to ensure that staff bring a fiscally responsible budget to [council]."
He said he has not had any specific discussions with city staff on revenue tools, but that "they're going to be bringing that forward as part of a longer discussion."
Councillor Shelley Carroll, a former budget chief under mayor David Miller, said the city needs to look at new revenue tools. But she, too, said she would not be in support of creating specific taxes on cigarettes or alcohol.
"The difficulty with any point-of-sale tax … is because smoking, alcohol, certain forms of entertainments – it's a very expensive proposition to implement that tax," Ms. Carroll said.
She said it would cost about $12-million to implement such a tax, and likely only collect about the same amount.
The last time city staff explored the idea, in 2007, the report found that a 1-per-cent tax on alcoholic beverages could bring in about $15-million each year. A 1-per-cent tobacco tax would bring in $6-million. And a 1-per-cent entertainment tax – a tax on tickets for movies, sports events or other live events – could bring in about $3-million.
"It'd be about a wash," she said.