Toronto Sales Tax

[EnviroTO]

There is a policy that has been adjusting the residential to corporate property tax imbalance for years now. Every year the business property tax rate will only go up a fraction of the residential rate improving the situation gradually. No politician in any party would fix it over night because they know they would loose their job. All the other expenses and taxes a business in Toronto experiences are comparable to other jurisdictions.

 

[gristle]

The idea of adding a new tax that would indirectly address issues of responsibility concerning what level of government should be managing what services makes no sense. For example, the the Toronto Land Transfer Tax cannot address the overwhelming cost of welfare in the city, nor can it address increasing demands from city workers who have union leaders who view such expanded revenue streams as targets for their escalating wage settlements. Before any further tax changes take place, there should be a serious restructuring of what level of government should be responsible for.

 

[Glen]

There is a policy that has been adjusting the residential to corporate property tax imbalance for years now. Every year the business property tax rate will only go up a fraction of the residential rate improving the situation gradually. No politician in any party would fix it over night because they know they would loose their job. All the other expenses and taxes a business in Toronto experiences are comparable to other jurisdictions.

I am well aware of city tax policies and programs. In the ETBC program the city states that the program, by its end, would bring parity to its commercial tax rate and that of the surrounding regions. This was calculated by taking the far below average Toronto residential rate and multiplying it by 2.5. Then the percentage (mill rate) was compared to the current average of the surrounding municipalities.

This ignores the fact that within the years of the program, Toronto’s residential rate will rise, Furthermore it ignores the most important factor. That is the ratio of taxes between classes. Currently, for example, In Vaughan the ratio (inc. both tiers) is 1.21:1. Toronto’s tax rate is set to rise faster than the surrounding regions. In fifteen years it will be very close to the rates elsewhere, maybe even much higher. It is the multiplying of the future rate, times 2.5, compared to the future residential rates in competing areas (multiplied by 1 to 1.5) that Toronto needs to address. There is no way possible for Toronto to reach parity until its ratios are addressed. Using the mill rate is a red herring. In fifteen years the rate will still be 2.5 times the residential compared with a near 1:1 rate elsewhere.

As such Toronto will continue its march towards being a bedroom community for the 905 region.

 

[Glen]

EnviroTO,

Here is an interesting tidbit to chew on...

Service, Total, Per Resident, Per Household (2.5 per)

General Government $942,149,071, $344, $860
Protection to persons and property $1,509,295,258, $551, $1,378
Transportation $2,071,578,430, $756, $1,891
Recreation and Cultural Services $820,586,170, $299, $749


As you can see, just for these services, ignoring the mandated and cost shared ones and the capital budget, the cost per household is $4,878. Any new residential unit will not provide sufficient tax revenue to cover just those expenses, let alone all the others. Unless the city is willing to allow for a dilution of services. Every residential unit constructed in Toronto worsens the city's fiscal well being by being a net consumer of resources.