Toronto is the biggest city in Canada, and among the half dozen largest cities in North America, but our city is suffering from a lack of investment in social and physical infrastructure (everything from affordable housing to public transit).
The mathematics are really quite simple:
To build a great city (which also means a healthy city and an equitable city), new investments are needed in social and physical infrastructure. Toronto needs the money to make those investments. The city’s current package of “revenue tools” (property taxes, user fees, grants, etc.) falls short of the need by at least half a billion dollars, according to city estimates. New revenues are needed, including the proposed land transfer and traffic congestion taxes that were deferred by a one-vote margin by City Council earlier this summer.
A land transfer tax (a tiny percentage from the sale of properties in Toronto, which would be higher for Rosedale mansions and lower for low-end-of-market condos in north Etobicoke) is not a new idea. As we noted in the Wellesley Institute’s Blueprint to End Homelessness in Toronto last year, a land transfer tax to raise the revenues to support the development of urgently needed new affordable housing was proposed way back in 1918 in the first major study of housing problems in Toronto.
A wide range of groups in the community and the business sectors are calling for proper investments. In July, Don Drummond, Chief Economist of the TD Bank, estimated in a major new research report that the City of Toronto’s structural deficit was between $700 million and $1.1 billion. “The City’s structural deficit acts as a financial straightjacket, limiting its flexibility in managing pressing challenges,” said Drummond. “That’s why the City must consider a number of new revenue tools.”