Local councillors disagree on need for Toronto to conduct a Core Services Review

At a special meeting earlier this month, Toronto councillors approved new tax measures including a hike to the land transfer tax for purchases of home more than $3 million.

By AMARACHI AMADIKE, Local Journalism Initiative Reporter

As Toronto sinks deeper into an affordability crisis, city councillors recently approved a slew of measures in an effort to close the gap on an estimated $1.5 billion in pressure on its budget in the coming year.

Budget pressures refer to the “unavoidable consequence of allocating scarce resources between limitless societal needs.”

Among the measures Toronto Council approved at a special meeting earlier this month was an increase in the land transfer tax for homes valued at $3 million or more, and a request to the provincial government for the city to be able to levy its own municipal sales tax.

However, Beaches-East York Councillor Brad Bradford is urging councillors to explore in-house cost saving measures before increasing taxes on Toronto residents.

“The discussion around the long-term financial plan is really a conversation about affordability,” said Bradford.

On Sept. 6, councillors voted 20-3 in favour of increasing land transfer tax rates for the sale of homes that are $3 million or more. This, according to city staff, will generate an estimated $26 million annually.

Councillors also voted to get rid of the $5 per hour cap on on-street parking rates as well as moving forward with plans to ask the provincial government for a percentage of the harmonized sales tax (HST), or permission to implement a municipal sales tax.

“Toronto is the most expensive city to live in in the entire country,” said Bradford. “So a regressive tax like a sales tax is something that disproportionately impacts low income households and something that will make life in the city more expensive during an affordability crisis.”

Bradford said that a municipal sales tax could potentially also bring challenges to the “economic competitiveness of our city” as the small business community would be at risk of losing customers
“You would kill entire industries overnight because nobody would buy [things like] furniture, computers, or cars in the City of Toronto,” said Bradford. “They would instead just go north of Steeles. So it’s not very well thought out. A tax that makes literally all goods and services more expensive in the city seems completely tone deaf to me.”

Although most councillors are in favour of the municipal sales tax as an alternative to cutting city services such as TTC – citing other big cities that use similar revenue generating methods – Bradford believes that a Core Services Review undertaken by a third party is warranted in order to ensure the city has looked into every alternate cost saving measure that it can unlock.

“It’s not going to be one thing; it’s going to be maybe 50 little things,” said Bradford. “That’s how we’re going to close the gap.”

Although Bradford was disappointed Toronto Council would “just slam the door on potential savings” at the Sept. 6 meeting, he was reminded that the last Core Services Review only uncovered $16 million in savings following a $3.5 million investment in the process.

“Even if we could find five, 10, or $20 million, isn’t that a worthwhile exercise given the magnitude of the financial crisis in front of us?” he said.

However, other councillors including Toronto-Danforth Councillor Paula Fletcher, argued that a Core Services Review simply was not necessary. They highlighted that while the last review by KPMG in 2011 uncovered up to $300 million in saving opportunities over a two-year period, it would have come at an enormous cost in the loss of services for residents.

“The fact is that you’re going to spend a lot of time but (we need to) focus on building the things that we’re supposed to build and moving the agenda forward,” said Fletcher. “We have a new mayor; she’s got ideas. Just to bring up having a whole service review sends the whole place into a maelstrom.”

The previous review recommended changes such as moving the criteria for snow plow deployment from five centimetres of snow to eight centimetres. It also suggested closing down some libraries as well as omitting water fluoridation.

But Bradford said his idea of a Core Services Review isn’t about cuts to such services. “There’s a lot of fear-mongering that comes with this. Of course we’re not closing things like community centres. Those are core services for the municipality to deliver.”

Bradford said a review, in part, aims to remind upper levels of government that some of the services Toronto provides are not core to the municipality but are in fact duties of upper levels of government. Many of these responsibilities were downloaded to the city – something that Toronto can’t afford anymore without federal and provincial assistance.

Fletcher, on the other hand, believes that an in-house review (as opposed to third party Core Services Review) would be a better use of time.

“Staff are already charged with finding efficiencies, which they’re very good at doing because they happen to know the city’s business,” she said.

The 2023 budget process saw city staff discover $289 million in budget savings through an in-house review and changes to various services.

Although Bradford insisted that no amount of savings is too small or a waste of time, he acknowledged the city will still need to implement some tax measures to close Toronto’s anticipated $46.5 billion gap over the next 10 years.

“I think it’s a combination of both, there were some (taxes) that I supported,” he said. “I think that there are some things that we are going to need to do to raise additional revenue. It’s just my perspective and personal belief that before we go out and hit people with all of these additional taxes, we should just do some of the work on our own side.”

At the Sept. 6 meeting, an amended motion for a city staff report on the value of a Core Services Review carried with a vote of 13-10. That report is expected in early 2024.

— Amarachi Amadike is a Local Journalism Initiative Reporter for Beach Metro Community News. His reporting is funded by the Government of Canada through its Local Journalism Initiative.


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