Toronto council wades into murky transit tax talks

City council’s discussion of transit taxes had barely begun Wednesday before it was clear that councillors were already earmarking the money for transit lines.

The lines discussed ranged from the Scarborough RT and downtown relief subway line to a North York relief line.

City Manager Joe Pennachetti said he knew those discussions were underway even though staff would have preferred that councillors not discuss individual transit projects before the fall, after the provincial government has seen Metrolinx’s recommendations for new tax tools.

He also warned that council would need a 2/3 majority to re-open discussion of replacing the SRT with a subway rather than the planned LRT conversion.

Some Scarborough councillors have made tying new transit taxes to a Scarborough subway a key condition for endorsing revenue tools.

Metrolinx says the region needs to raise $2 billion a year just to build its Big Move regional transportation plan.

City staff is recommending that council endorse a gas tax, sales tax, development charges and a $1 a day commercial parking levy as the first revenue tools.

Those are the taxes Pennachetti said were fairest, given that the tax plan can’t unfairly punish drivers, who in many parts of the city, simply don’t have enough public transit alternatives to leave their cars at home.

Metrolinx and the city have agreed they would wait until the fall to discuss how to pay for the operating costs of new lines, said Pennachetti.

“You’re going to need hundreds of millions of dollars even early in 2025 for operating,” he said.

Ford, who wasn’t in council chambers for most of the transit discussion, spoke to reporters after an appearance at the McDonald’s in the Eaton Centre food court for the food company’s McHappy Day.

“I don't want any taxes. We don't need any taxes. Enough money in government to pay for subways,” he said, then cited examples of waste by the provincial Liberals.

The mayor’s allies, who had tried to stall council on debating transit taxes by deferring the city manager’s report at executive committee, insist that Toronto is being used by the province – that the governing Ontario Liberals should own the tax grab.

“They should be helping out to pay for the transit in the Greater Toronto area. It’s far bigger than any of the municipalities could ever afford. But instead of them coming up with the money they’re trying to make it look like we’re taxing for the money. That really isn’t the case, they’re going to make the decision in the end but they’re just trying to (muddy) the waters,” said Deputy Mayor Doug Holyday.

Some councillors still believe there are measures that should be explored before new taxes, he said.

“There’s other sources of revenue and there’s other efficiencies that still have to be had,” Holyday told reporters.

But council needs to state its position in the regional discussion, said Pennachetti.

“If we don’t give an opinion they may choose tools we don’t like,” he told council.

The debate on transit taxes is expected to continue at council on Wednesday afternoon.

With files by Daniel Dale