Toronto council's commercial parking levy vote delayed until year's end

Mayor Olivia Chow's executive committee has pumped the brakes on sending a proposed commercial parking levy to city council for a debate next month, delaying a key vote on the new tax until the end of the year.

The committee voted Thursday to send the proposal to tax business parking spots across Toronto back to city staff for more work. They'll spend most of 2024 consulting with businesses, conducting a parking space census and refining their a plan to implement the tax before coming back to councilllors at the end of the year. 

Councillors on the committee backed Budget Chief Shelley Carroll's motion which means it won't be sent to council next month.

Carroll said additional work needs to be done to ensure the tax works for businesses and includes the necessary exemptions.

"I don't want to spend a year on this, (and) have it sort of fall apart at the end of the year, because we didn't do this work upfront," she said.

The proposal creates a two-tiered system which would see downtown and waterfront businesses that own the spaces charged 50 cents per spot, per day. Businesses across the rest of the city would be charged 25 cents per spot, per day.

City staff estimate it could raise as much as $150 million a year. The levy is part of the city's continuing efforts to grapple with a structural deficit, which last year was as high as $1.8 billion.

Carroll said that business consultations on the tax should take place before council votes to approve any proposal. The current plan doesn't include exemptions for disabled parking spaces or EV charging stations in lots and those could be included, she said.

"The exemptions are going to come from this engagement and consultation," she said. "And there will be exemptions."

Consultation to take place this year

Coun. Josh Matlow supports the levy and backed Carroll's motion. Some people who support the levy will be frustrated it's not moving along faster but working with businesses will be key, he said. 

"I actually think that we'll be able to implement this quicker, fairer, and more successfully, if we go through this consultation and we do it well," he said.

City staff were already planning to do much of the design work and consultations this year, but were seeking council approval on the guiding principles of their proposal.

Coun. Brad Bradford, who is not on the mayor's hand-picked executive committee, slammed Chow and the councillors for re-directing the debate away from all of council. By referring the report, he said, it creates a dynamic where city staff might spend nearly a year consulting and designing the parking levy only then to have councillors vote it down later.

"It's disappointing to see that this process circumvents the broader conversation that could have been had a council," he said.

"We could have brought a common sense perspective to this and just sort of say, 'We don't want to spend the time and staff resources, pursuing this yet again.'"

Bradford said the tax will be a controversial measure whenever it lands before all of city council, so better to have that debate now than put it off.

"There's a lot of folks on the broader council who have concerns with the parking levy as a punitive additional tax on our small business community," he said.

Chow's spokesperson Arianne Robinson said in a statement that the mayor supported Carroll's motion because it will "ensure that the debate before council will be informed by the public's opinion, key stakeholders, and the revenue it will generate."

City staff estimates for the new levy come in on the low end of projections in several previous reports to council. 

In 2016, a report from consultants KPMG estimated the levy could raise between $131 to $535 million a year. In 2021, a city staff report said the revenues could range between $191 to $575 million a year.

Those estimates were based on charging the owners of the lots $1.50 per day, per parking spot.

'Wrong tool at the wrong time': Board of Trade CEO 

Toronto Region Board of Trade CEO Giles Gherson said he was glad to see the committee send the report back to staff for more work. Earlier in the week, he'd called for councillors to take a cautious approach to the tax because it comes at a time when many businesses are still struggling to recover from the pandemic.

"We're already a very high cost jurisdiction to operate in," he said. "Businesses aren't going to stay here, and then they're not going to expand here, with the high costs that we have."

On Friday, Gherson said the board continues to be skeptical about the levy as a solution to Toronto's structural deficit.

"We believe it's the wrong tool at the wrong time," he said. "What we had asked for is a comprehensive look at revenue tools and expenditure management, looking at the 2025 budget."

Advocacy group TTCRiders has been pushing for the levy and want its proceeds directed toward public transit. Director Shelagh Pizey-Allen said the referral will mean councillors will have all available information in front of them when they make a decision on the new tax this year.

"What's really important is that this revenue tool be approved to be in time for the 2025 budget," she said. "$100 million to $150 million for public transit would be totally transformative."