Toronto

Why Toronto's controversial vehicle registration tax could make a comeback

Two Toronto city councillors will try to convince their colleagues Thursday that the public is ready for at least two new taxes to help cover COVID-19 costs — including the controversial vehicle registration tax, scrapped by the late former mayor Rob Ford.

1% city sales tax also on table as part of motion by Coun. Kristyn Wong-Tam

Coun. Kristyn Wong-Tam's motion calls on city staff to look for new taxes that could be used to fund city services ravaged by the pandemic, most notably, the TTC. (Spencer Gallichan-Lowe/CBC News)

Two Toronto city councillors will try to convince their colleagues Thursday that the public is ready for at least two new taxes to help cover COVID-19 costs — including the controversial vehicle registration tax, scrapped by the late former mayor Rob Ford.

Coun. Kristyn Wong-Tam (Toronto Centre) and Gord Perks (Parkdale-High Park) say the city is facing a serious cash shortfall in next year's budget due to the pandemic, and that the TTC has taken an especially hard hit, with ridership at historic lows.

"The forecasted opening deficit that we will be looking into in 2022 is sitting at around $1 billion and up to potentially $1.4 billion," Won-Tam said. "So the city does need revenues. We need new revenue tools."

But not everyone is on board with the proposed tax hikes.

Deputy Mayor Stephen Holyday called the suggestion "both brazen and ignorant."

"With the inflation that we're facing right now, rising fuel costs, rising price of food, people are just looking to get by in this city. Not give more," he said.

Deputy Mayor Stephen Holyday called the proposal of new taxes 'brazen and arrogant.' (Mike Cole/CBC)

Wong-Tam's motion calls on staff to come up with "options for additional revenue streams...including but not limited to" a sales revenue tax and a vehicle registration tax.

It would be up to staff to decide exactly how much the new taxes will cost people, she said.

But Perks, who seconded her motion, said he'd like to see an increase of one per cent in the sales tax for items bought within city boundaries and the vehicle registration tax set at about $70.

The new money would be used to help cover the TTC's 2022 budget deficit, which is expected to include more than $460 million in lost passenger revenue alone, according to a new TTC report.

TTC ridership is currently at about 50 per cent of pre-pandemic levels, the report states. That number is expected to rise to 81 per cent by the end of 2022.

Wong-Tam said the VRT implemented by former mayor David Miller and later rescinded, generated about $55 million a year.

In 2019, Coun. Mike Layton attempted to revive the tax but his motion was defeated 18-8.

But is the public ready now to accept new taxes?

Wong-Tam believes it is.

Provincial approval needed on sales tax 

"(If) we spread it across drivers, car owners, as well as visitors and tourists to the city to pay sales tax when they buy goods and services in the city," she said. "I think we can bring people in Toronto along with us to approve this." 

Wong-Tam's motion will require a two-thirds majority vote at council Thursday in order to be voted on immediately. Otherwise, it will be referred to a committee for further study.

Even if approved, the new sales tax would have to be approved by the province.

The city can implement the VRT without provincial approval. 

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