The city of Toronto has kicked off a public conversation about taxes, tolls and fees to pay for a region-wide transit expansion – a conversation that could be challenging given the province's financial straits and the mayor's opposition to tapping taxpayers.
A new report from Toronto's city manager, released Monday, recommends 10 different methods to raise the extra $2-billion per year needed to pay for more transit lines across the Greater Toronto Area and Hamilton.
The options include: highway tolls; 1-per-cent increases to income taxes, sales taxes or property taxes; a new payroll tax; commercial parking levies and even a revival of the vehicle-registration fee that Mayor Rob Ford killed after taking office.
The 10 funding options will be at the centre of public consultations this winter and spring, after which Toronto city council will vote on the menu of choices it likes best and forward a recommendation to Metrolinx, the province's transportation authority for Greater Toronto and Hamilton.
Metrolinx is expected to present its long-awaited "investment strategy" – its plan to raise new revenue – in June, 2013.
The city manager's report argues that new revenue tools should be applied across the region, never mind municipal boundaries.
That is good news, according to the president of the Toronto Board of Trade, which says the GTA's average 80-minute round-trip commute is the worst of 24 major cities.
"I think this is a great moment here in terms of the city saying, 'We need to go out and talk to the public and it needs to be regional,'" Carol Wilding said.
However, there are fears that Queen's Park, which controls Metrolinx's purse strings, will not have the political will to raise taxes or create new ones to pay for more subway, light-rail and bus lines in the GTA.
"Without public support," the report says, "the province will be unlikely to implement the new taxes that are required to fund the plan."
Even if Dalton McGuinty's minority government takes the risky step of endorsing new revenue tools for the region, the Liberals could face intense push back from Mr. Ford.
Mr. Ford rejected new revenue tools earlier this year during a high-profile fight over building light-rail or subways. His office declined comment Monday.
Deputy Mayor Doug Holyday said he has not spoken to the mayor about the issue, but he expects Mr. Ford shares his reluctance to ask residents to open their wallets for transit.
"I would think he'd probably have a similar view to myself. We need to go to the public to see what appetite they have," Mr. Holyday said.
Councillor Josh Matlow, who pushed for the city to develop a funding plan, said it is important that Toronto send a clear message to Queen's Park.
"The most important thing that the province needs to hear from Toronto is that we want them to support an initiative to raise revenue," Mr. Matlow said. "What that will be is something we need to have a conversation with the province, Metrolinx and the people of Toronto on."
At the same time the city asks residents how they would like to pay, it will also be asking them what projects the new money should buy.
That could set the stage for another intense debate about what projects Toronto should champion, and which of those should be built first.
"My view is we're not going to get the buy-in unless we can demonstrate what the money will buy," said Councillor Karen Stintz, chair of the Toronto Transit Commission.
She predicted the city will still have to find its own funding source for transit, even if new region-wide revenue tools go ahead.
Without money of its own, critical Toronto projects such as a downtown relief subway line could fall to the bottom of the region-wide queue, she warned.
Despite concerns about political reluctance, Ms. Wilding says gridlock in the GTA has become so punishing that residents and business owners are ready to reach into their own pockets to solve it.
"I hazard to say that the public is ahead of the politicians in general on this," she said.
- With a report from Elizabeth Church
What's your choice?
Ten options for financing public transit across the GTA:
Personal income tax increase of 1 per cent (raises $1.4-billion annually)
Sales tax increase of 1 per cent ($1.3-billion)
Property tax increase of 1 per cent ($90-million)
Payroll tax of 1 per cent ($500-million)
Highway tolls of 10 cents/per km ($1.5-billion)
Fuel tax of 10 cents per litre ($500-million)
Vehicle tax of $100 ($300-million)
Commercial parking levy of $365 per space ($1.08-billion)
Land-transfer tax of 1 per cent ($600-million)
Development charges of $5,000 per unit ($200-million)
Source: Long Term Transportation and Funding (Investment) Strategy, City of Toronto