Toronto Mayor Olivia Chow attends a news conference with Ontario Premier Doug Ford, not shown, in Toronto on Monday Nov. 27, 2023. THE CANADIAN PRESS/Chris YoungChris Young/The Canadian Press
Craig Rouillard is an e-commerce executive in Toronto.
Toronto’s budget deficit, now at $1.5-billion, is not solely the responsibility of homeowners, so the city should not be expecting them to fund all its needs. Yet that appears to be exactly what it is doing with its plan to raise property taxes by an astronomical 10.5 per cent.
It is neither equitable nor financially possible for many residents to pay such taxes. Indeed, imposing the responsibility of generating additional city revenue on homeowners will only exacerbate the affordability crisis.
Yes, homeowners are finding it difficult to keep up with the rising cost of living, too. Last year property taxes were raised by 7 per cent. Water and garbage rates were also increased by approximately 3 per cent. Anyone buying a home in Toronto is also subject to a matching land transfer tax on top of the provincial tax. Every tax increase only contributes to the housing affordability crisis.
By increasing property taxes, the city is targeting homeowners without considering how municipal services are consumed.
Everyone in Toronto benefits from some of the following: 911 services, public safety, transit, parks, rinks, pools, sanitation, libraries, public health, schools, beaches, snow removal, safe roads etc. The costs of these services have increased dramatically. But city user fees and tolls – measures that would have spread the costs more equally – have all been rejected in the past.
The thing is, homeowners and renters consume these services equally. As a homeowner, I don’t mind paying my fair share, but I shouldn’t have to pay for renters’ share too.
Every Toronto resident needs to contribute to the maintenance of the city. All the more so because the city’s population is almost evenly split between homeowners and renters – 51.9 per cent and 48.1 per cent.
To lean on homeowners to fund municipal services might be justified in other cities. In Ontario, 68 per cent of people own their homes. Ownership in neighbouring communities sits at 82 per cent in York Region, 75 per cent in Peel, 64.2 per cent in Oshawa and 77.5 per cent in Oakville. On a per capita basis, other cities have a larger tax base to contribute to the cost of services for all city residents.
But Toronto does not have the same kind of tax base and has more infrastructure to service than most cities. Fewer homeowners per capita means relatively fewer taxpayers to fund city needs.
Any argument that suggests renters contribute to municipal coffers via the property owner – because they pay property tax too through their rents – is not valid. That’s because, in practice, many landlords will end up bearing the 10-per-cent increase in property taxes.
The Residential Tenancies Act limits landlords to increases averaging less than inflation every year. In 2019, the increase was 1.8 per cent; in 2020 it was 2.2 per cent; in 2021 it was zero; in 2022 it was 1.2 per cent; and in 2023 it was 2.5 per cent. This is well below the increases homeowners are being subjected to by the city and city-owned utilities.
Everyone needs to contribute to maintain services for all. Renters and homeowners alike. City council needs to stop taking the easy way out.
The double-ended squeeze of property tax increases and increases to municipal utilities, without the ability to adjust rents further, exacerbates the affordability crisis.
City council needs to more strongly consider alternatives that are broad-based and don’t burden a single segment of the taxpayer community. If they spend more than just a passing moment on a complex issue, they might consider more equitable and effective options. This taxpayer is not privy to all the options, but several alternatives that come to mind include a municipal consumption tax, user fees on city services and a tourism tax.
If city council did the job they’re elected to do, you’d think they could come up with more than this short-sighted and unfair solution.
Sadly, I doubt they will do the right thing. Just don’t be surprised when I pull up stakes and take my tax dollars elsewhere. Too bad, though, I liked my time in the 6ix.
Editor’s note: This column has been corrected to show that renters in Toronto do pay property taxes through their rents.