Ontario Premier Kathleen Wynne is pictured Sept. 30, 2013. The real estate industry will argue against a new parking tax when meeting with an advisory panel Ms. Wynne set up to examine transit funding.Kevin Van Paassen/The Globe and Mail
Representatives from the real estate industry are meeting today with the advisory panel Ontario Premier Kathleen Wynne recently set up to examine transit funding, and will present a report arguing against a new parking tax in the Greater Toronto and Hamilton Area.
The 13-member advisory panel is reviewing recommendations from the province's Metrolinx transit agency on different ways to fund public transit. A business parking levy is among the main suggestions. It would be charged on parking spots that are off of streets and not residential. Metrolinx has estimated that the tax could raise $350-million a year.
It is one of the options the province is considering to fund a massive transportation plan that it hopes will reduce gridlock. The average amount of time that people in the Greater Toronto and Hamilton Area now spend commuting is 82 minutes per day, and it's estimated that without a transportation overhaul that number will rise to 109 minutes by 2031.
The commercial real estate industry, which is a big proponent of transit improvement, is arguing that a parking tax should not be part of the solution.
"The business parking levy is a regressive tax that punishes businesses and reduces competitiveness, which will have a negative impact on the GTHA's economy," said Carolyn Lane, from the Real Property Association of Canada, a group that represents real estate investment trusts, pension funds and other major property owners.
REALpac and a number of other industry associations – the Building Owners and Managers Association, International Council of Shopping Centres, Toronto Financial District Business Improvement Area, NAIOP and the Building Industry and Land Development Association – commissioned a report from the Altus Group to examine the proposed tax.
The report argues that the tax will fail to change drivers' behaviour, will have a negative impact on business competitiveness and economic development in the region, and will not raise as much money as expected.
It says that more than half of the revenue that the tax does generate will be paid by the retail sector, about a third by the office sector, and more than 12 per cent by manufacturing plants and others in the industrial sector. More than 60 per cent of the tax would be collected in Toronto, with the rest coming from Peel Region, York Region, Durham Region, Halton Region and the City of Hamilton.
"The investment in public transit should be financed by public transit users (through user fees) and everyone in the community (through general taxation applied to everyone in the region)," the report says, adding that the parking levy would only tax the business community.
"If the proposed parking levy is to generate $350-million per year as expected by Metrolinx, it means that businesses in the GTHA would face substantially increased operating costs each year," the report says. "This will result in less business investment in the region as the new parking levy will reduce the financial return to business, especially small business."
But the report also says that the tax is unlikely to raise $350-million per year.
"Based on Altus Group's analysis, there are some 3.0 million non-residential off-street parking spaces in the GTHA, which is considerably lower than the 4.1 million estimated by Metrolinx," it says.