Will Ford sign off on Toronto's sales tax? Council will need to make the case for revenue tool

A major piece of Toronto's new plan to address its long-term fiscal woes hinges on the cooperation of Doug Ford, as the city faces the daunting task of persuading the premier to support a municipal sales tax.

That tax is part of a slew of new "revenue tools" proposed by city staff as a way to address over $46.5 billion in financial pressure faced by Toronto over the next decade. The city's financial problems have been mounting for years but were made worse by the pandemic as the shelter system strained under the pressure of increased demand and transit ridership — and revenues — hit rock bottom. 

City staff, backed by a consultant's report on new taxes and fees, are recommending council ask the province to grant it the power to levy a municipal sales tax, which could raise between $800 million and a billion dollars a year. Asked why she is optimistic Ford will approve the tax, Chow said it's because there are examples of it across Canada.

"Quebec provides a growing source of revenue to a big city like Montreal," she said. "I was just talking to the mayor of Montreal. My gosh, I'm really jealous. I am."

The update to Toronto's long-term financial plan was released Thursday and has a number of staff proposals aimed at addressing what staff call an "unprecedented financial crisis." The city faces a $1.5-billion budget shortfall this year alone, staff say.

In addition to the sales tax, city councillors will have to consider increasing property taxes, the vacant home tax, the municipal land transfer tax and selling off city land. Chow said she intends to raise the sales tax with Ford when they next meet.  

"We are the level of government closest to the people," she said. "It's hard to say 'no' when someone needs the help."

The request for the sales tax could be a tough one considering Ford's past stance on taxes.

Ford was elected to Toronto council in 2010, the same year his brother Rob was elected mayor vowing to end the "gravy train" at city hall. Their platform focused on cutting waste and eliminating a vehicle registration tax created by council to raise revenue.

Ford came to power as premier in 2018 making good on a promise to scrap the then-Liberal government's cap and trade system to address climate change. Throughout that election campaign, he labelled it a punitive carbon tax that made life more expensive for Ontarians.

When its comes to Toronto's recent requests for new taxes and fees, Ford quickly rejected the idea of tolling both the Don Valley Parkway and Gardiner Expressway when it was floated last year by former mayor John Tory. Toronto would have required the province's permission to levy those tolls and a previous request to do it was rejected by former premier Kathleen Wynne's government.

Asked this week if he would grant Toronto the power to levy the tax, Ford's office did not directly answer the question.

"Our government is focused on keeping costs down for people, especially at a time when the cost of living is going up," Caitlin Clark said in a statement. 

Deputy Mayor Jennifer McKelvie said the city has been advocating for additional revenue sources for some time, so the request will come as no surprise to Ford.