This editorial was written and published by the Toronto Star on January 27, 2023.
Some say the defining features of a world-class city are its food, nightlife, and architecture. Some leading cities have another feature, one that is perhaps less sexy than those other attributes, but that is also instrumental for their bottom line: a tax on commercial parking lots.
New York City, Los Angeles, Montreal and Sydney rely on parking levies, in some form, as a tool to raise revenue. In Sydney, a parking levy applying to privately owned, non-residential, offstreet paid parking generated almost $100 million Canadian, according to a 2016 report from KPMG. This revenue, typically, a small daily fee paid per parking spot by the owner of the lot, can go into a city’s general coffers or be directed to specific projects.
In Montreal, the report states, annual revenues from a parking tax were approximately $23 million dollars which is designated for transit infrastructure.
Where is Toronto in all this revenue generating activity? Sadly, the answer is nowhere good.
Toronto is currently grappling with an enormous budget shortfall, and drastically reduced TTC ridership. The city is in a uniquely tough predicament due to the pandemic, as well as its financial reliance on other levels of government.
But nothing about this predicament prevents the city from helping itself. Why has the city not tapped a revenue tool used successfully in other jurisdictions to alleviate some of its financial strain?
The budget pressures demand that Toronto take a fresh look at the feasibility of imposing a tax on non-residential parking spots.
For those justifiably concerned about the equity of such a policy, there are ways to account for it. For example, as Gideon Forman, a transportation policy analyst at the David Suzuki Foundation, wrote in the Star recently, the city could exempt lots owned by hospitals, religious institutions, daycare centres or small familyrun businesses. He suggested that the levy could also be higher downtown (where space is at a premium) and lower in the suburbs.
Some argue that such exemptions would present a hellish administrative challenge. But the city cannot afford to write off potential revenue tools because they require complex problem solving.
It’s been estimated that the revenues from a parking levy could generate between $191 million and $575 million annually for Toronto, though staff cautioned in a recent report that estimate did not account for any exemptions. Not only would a parking levy create funds Toronto desperately needs, it would make the city an honest broker where its climate strategy is concerned.
Every political choice is a value judgment. If the city abstains from taxing commercial parking lots yet at the same time reduces service and increases fares on the TTC, residents will get the message that drivers are more valuable in Toronto than transit riders.
The city says it is planning for a “climate emergency” but an unwillingness to tax parking lots while shortchanging transit riders suggests otherwise.
In the end, it is telling that a group of newly elected city councillors, Dianne Saxe (Ward 11 University-Rosedale), Chris Moise (Ward 13 Toronto Centre) and Alejandra Bravo (Ward 9 Davenport), are some of the loudest voices advocating for a parking levy. This is precisely what new leaders should do: bring fresh perspectives to ideas once scoffed at.
Our hope is that the city’s grim financial situation will compel the veterans to stop scoffing. And perhaps one of them has.
A spokesperson for John Tory says the mayor “supports looking at any reasonable new revenue tools for the City of Toronto.” We implore you Mr. Mayor: take a good long look at this one.
The city says it is planning for a “climate emergency” but an unwillingness to tax parking lots while shortchanging transit riders suggests otherwise