Should Toronto tax parking? Transit advocacy group wants new levy to help pay for TTC

The City of Toronto is leaving hundreds of millions of dollars in needed tax revenue on the table each year because it hasn't imposed a tax on parking, a transit advocacy group says.

TTCRiders says had Toronto implemented the commercial parking levy after it was first examined in 2016, the city could have raised as much as $2.8 billion. And the group says it wants city council to take another look at the tax as they work on the 2023 budget, which will cut TTC services. 

"This is a potentially transformative tool that could generate hundreds of millions of dollars every year for climate and public transit," said TTCRiders director Shelagh Pizey-Allen.

"It's a parking levy on big malls and commercial lots. And it has been talked about, but staff have never studied how can we implement it here in Toronto?" 

The group is set to announce a renewed push to have city staff examine the tax Monday morning.

It comes ahead of city council's potential approval of TTC's operating budget for 2023, which includes fare hikes and service cuts set to come into effect this spring. 

Last year, the commission was set to provide 180,200 total hours of service. With this new plan, the number of total hours served will fall to 164,200, representing a roughly nine per cent decrease across the board. 

Pizey-Allen says the group is pulling its figures from a pair of city reports on how much the tax could generate from the city. 

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 are based on charging the owners of the lots a $1.50 per day, per parking spot.

Neither report broke down in detail the intricacies of how Toronto could adopt the measure.

KPMG's report said it could take up to two years to create a regime to administer the tax. The consultants also warned that there could be negative consequences for the city if it were to adopt the tax. That included harming both small and large businesses and creating a disincentive for businesses to set up shop in the city.

Pizey-Allen said the tax could be deployed in a strategic way to avoid harming small businesses and in specific areas of the city. These are all questions the advocates would like to see staff study, she said.

"There's been a lot of reports but what hasn't come forward publicly is what are the options for implementing this in Toronto, so we can have a real debate," she said.