Item - 2016.EX16.3
Tracking Status
- This item was considered by Executive Committee on June 28, 2016. The Executive Committee has referred this item to an official or other body without making a decision. Consult the text of the decision for further information on the referral.
EX16.3 - Updated Assessment of Revenue Options under the City of Toronto Act, 2006
- Decision Type:
- ACTION
- Status:
- Referred
- Wards:
- All
Committee Decision
The Executive Committee:
1. Referred the item, including motion 1 by Councillor Michael Thompson and motion 2 by Councillor James Pasternak, to the City Manager for consideration as part of the forthcoming report on the Long-Term Financial Direction in fall 2016.
Motion 1 by Councillor Michael Thompson:
"That the City Manager include an assessment of the economic impact of potential new taxes being considered as part of any further analysis of revenue options, and that this assessment be conducted in consultation with the General Manager, Economic Development and Culture."
Motion 2 by Councillor James Pasternak:
"That City Council request the City Manager and the Deputy City Manager and Chief Financial Officer to include in the forthcoming report on the City of Toronto's Long-Term Financial Direction, in the fall of 2016, the revenue opportunities for a surcharge on car rentals in the City of Toronto."
Decision Advice and Other Information
KPMG LLP gave a presentation on City of Toronto - Revenue Options Study.
Origin
Summary
During the 2016 budget deliberations, City Council directed staff to engage an external consultant to perform an updated assessment of the revenue potential of certain new taxes permitted under the City of Toronto Act, 2006 (COTA). The last time Council broadly considered new tax options was in May 2013 (2013EX31.3) in context of providing advice to Metrolinx regarding its transportation growth funding strategy.
The consulting firm KPMG LLP ("KPMG") was subsequently retained to undertake the Revenue Options Study. This report serves to transmit the consultant study to Committee and Council.
The scope of work for the study includes those revenue options previously studied in 2007, as well as certain specified taxes currently not permitted under COTA. In addition the report includes a jurisdictional scan for Municipal Land Transfer Tax (MLTT), Carbon Tax and Uber Registration Fee. Finally there is a discussion on alternatives to these revenue options relative to property taxes.
The study and this report are also important groundwork for the Long-Term Financial Direction, and will be used for reference during the upcoming report in the fall of 2016. In June 2016 Council directed the City Manager and Deputy City Manager and Chief Financial Officer to report in the fall on a strategy that would optimize existing and potential new revenues, the latter based on a set of principles for their selection.
Table 1 below is excerpted from the study and lists the revenue options, summarizes the range of net revenue potential based on the rates indicated, whether the tax is currently permitted under COTA, and the estimated time to implement (from the time City staff receive approval and direction to proceed to the time of revenue realization).
TABLE 1 — Summary of Findings, City of Toronto Revenue Options Study by KPMG |
||||
Revenue Option |
Range of Net Annual Revenue Potential ($ millions) |
Permitted Under COTA |
Estimated Time to Implementation |
|
Alcoholic Beverage Tax (1 – 10% rate) |
21 – 151 |
Yes |
12 months |
|
Entertainment and Amusement Tax (1 - 10% rate) |
4 – 35 |
Yes |
12 months |
|
Motor Vehicle Registration Tax ($20 to $100) |
18 – 94 |
Yes |
6 months |
|
Parking Levy ($0.50 to $1.50 per spot / day) |
171 – 535 |
Yes |
18 months |
|
Road Pricing (Cordon Pricing) ($5 to $20 per day) |
89 – 377 |
Yes |
36 months |
|
Tobacco Tax (1 – 10% rate) |
5 - 46 |
Yes |
12 months |
|
Development Levy (2 – 10% rate) |
17 – 87 |
No |
12 months |
|
Hotel Tax (2 – 14% rate) |
21 – 126 |
No |
12 months |
|
Municipal Business Income Tax (0.5 – 2%) |
145 – 580 |
No |
24 months |
|
Municipal Personal Income Tax (1%) |
580 – 926 |
No |
24 months |
|
Municipal Sales Tax (0.5 – 2% rate) |
125 - 515 |
No |
24 months |
|
Parking Sales Tax (5 – 20% rate) |
30 – 121 |
No |
12 months |
In addition, this report responds to two City Council directions during the 2016 budget deliberations relating to Municipal Land Transfer Tax ("MLTT"): the feasibility of establishing a MLTT Stabilization Reserve Fund funded through budgeted surpluses of MLTT; and the advisability and feasibility of harmonizing the City's MLTT rate structure with that of the Province's Land Transfer Tax (LTT).
Background Information
https://www.toronto.ca/legdocs/mmis/2016/ex/bgrd/backgroundfile-94297.pdf
Appendix C - City of Toronto Revenue Options Study, prepared by KPMG, June 2016
https://www.toronto.ca/legdocs/mmis/2016/ex/bgrd/backgroundfile-94513.pdf
(June 28, 2016) Presentation from KPMG on City of Toronto - Revenue Options Study
https://www.toronto.ca/legdocs/mmis/2016/ex/bgrd/backgroundfile-94731.pdf
Communications
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61754.pdf
(June 26, 2016) E-mail from Geoff Kettel and Cathie Macdonald, Co-Chairs, the Federation of North Toronto Residents Association (FONTRA) (EX.Supp.EX16.3.2)
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61766.pdf
(June 27, 2016) Letter from Danielle Chin, Senior Manager, Policy and Government Relations, Building Industry and Land Development Association (BILD) (EX.Supp.EX16.3.3)
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61796.pdf
(June 27, 2016) Letter from Hamish Wilson (EX.Supp.EX16.3.4)
(June 27, 2016) Letter from Teresa Di Felice, CAA South Central Ontario; Frank Notte, Trillium Automobile Dealers Association; and Raymond Chan, CAA South Central Ontario - Letter with 2 attachments (EX.Supp.EX16.3.5)
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61817.pdf
(June 27, 2016) E-mail from Maria Carmen C. Cruz (EX.Supp.EX16.3.6)
(June 28, 2016) Submission from Richard De Gaetano (EX.New.EX16.3.7)
(June 27, 2016) Letter from Raymond Chan, Government Relations Specialist, CAA South Central Ontario (EX.Supp.EX16.3.8)
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61780.pdf
(June 28, 2016) E-mail from Brooks Barnett, on behalf of the Real Estate Industry Coalition (EX.New.EX16.3.9)
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61823.pdf
(June 28, 2016) E-mail from Johnny Smash (EX.New.EX16.3.10)
(June 28, 2016) E-mail from Victoria Jewt (JDS) (EX.New.EX16.3.11)
(June 28, 2016) E-mail from Laura Buccioni, Women's Habitat of Etobicoke (EX.New.EX16.3.12)
https://www.toronto.ca/legdocs/mmis/2016/ex/comm/communicationfile-61838.pdf
Speakers
Gideon Forman, Climate Change and Transportation Policy Analyst, David Suzuki Foundation
Patricia Reid
Mark Shapiro, Dream Team
Cathy Dziak, The Dream Team
Mary Hynes, Older Women's Network
Michael Rosenberg
Gary Rygus, Retail Council of Canada
Sheila Block, Senior Economist, Canadian Centre for Policy Alternatives Ontario Office
Terry Mundell, Greater Toronto Hotel Association
Johanne Belanger, Tourism Toronto
Andrew Weir, Greater Toronto Hotel Association and Tourism Toronto
Katrina Miller, CUPE Local 79
Hannah Alexander, STOP Community Food Centre
Hamish Wilson
Michael Brooks , CEO, Real Property Association of Canada
Myer Siemiatycki
Arthur Lofsky, Arthur Lofsky GR Consulting
Derek Moran
Victoria Jewt
Lisa Campbell
Amego Dorothy Adero, Women's Habitat
Johnny Smash
Councillor Janet Davis
Councillor Shelley Carroll
Councillor Joe Cressy
Councillor Gord Perks
Motions
That the City Manager include an assessment of the economic impact of potential new taxes being considered as part of any further analysis of revenue options, and that this assessment be conducted in consultation with the General Manager, Economic Development and Culture.
That City Council request the City Manager and the Deputy City Manager and Chief Financial Officer to include in the forthcoming report on the City of Toronto's Long-Term Financial Direction, in the Fall of 2016, the revenue opportunities for a surcharge on car rentals in the City of Toronto.
That the item, including the motions by Councillor Thompson and Councillor Pasternak, be referred to the City Manager for consideration as part of the forthcoming report on the Long-Term Financial Direction in Fall 2016.