Toronto Council approves City Building Fund levies to raise $6.6 billion for infrastructure and affordable housing

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Mayor John Tory speaking to Toronto City Council before it approved the City Building Fund levy

By Mark Buckshon and Robin MacLennan

Ontario Construction News staff writers

Toronto city councillors approved on Tuesday, in a 21 to 3 vote, a property tax increase to raise billions for transit and affordable housing projects across the city.

The City Building Fund currently in place will be extended and increased over the next six years, starting with an additional 1 per cent in 2020 and a 1.5 per cent increase each year, reaching 10.5 per cent in 2025. City staff estimate the additional cost per household over the six years will be about $326.

The levy will provide about $6.6 billion for new subways, subway signal systems, streetcars and station upgrades. It will also fund affordable housing projects to help the city reach its target of approving 40,000 housing units over the next 10 years.

“This funding is absolutely needed,” Mayor John Tory wrote in a Dec. 11 letter to council’s executive committee. “It is the only way, given the limited current tools available to us and the current political climate, that we can raise the billions of dollars we need to invest in the future of this city.”

The proposal comes after an Ernst and Young review concluded Toronto’s capital plan “may be unaffordable” without additional revenue. The consultants in their report advised that millions of dollars can be saved by seeking out more efficient processes and reducing waste, but these savings will not be sufficient to address the city’s infrastructure requirements.

In presentations, councillors observed that the city only works with 8 per cent of the available overall tax funds, with most tax revenue going to federal and provincial governments. Mayor Tory in his speech in support of the levy indicated the city will continue to push for fairer distribution of funds and user fees from other levels of government, but the city still needs to raise enough money to maintain its infrastructure.

He said the city remains committed to holding its operating budget tax increases at no more than the rate of inflation.

In his letter to the executive committee, Tory outlined how other attempts to raise funds had failed, including road tolls on the Gardiner Expressway and Don Valley Parkway being rejected by former premier Kathleen Wynne’s government. Also, additional gas tax revenues promised by the provincial Liberals were cut by the current government.

“We cannot lament the current political climate as a reason for inaction in our city,” Tory wrote. “This is the right thing to do to build up our city and protect its prosperity.”

The Carpenters District Council of Ontario (CDC) supported the new levy.

“Carpenters have been strong advocates for transit funding and for affordable housing funding for years,” CDC president Mike Yorke said in an interview before the vote.

“When we see someone stepping up to the plate as Mayor John Tory is doing, we are obligated to stand up and support him.”

In a recorded vote all councillors supported the building fund but three, Councillors Michael Ford, Anthony Perruzza and Stephen Holyday.

Councillors also approved a motion, put forward by Coun. Mike Colle, that would see property tax bill contain a line making clear the city only works with 8 per cent of tax revenue, compared to the  92 per cent that goes to the federal and provincial governments.

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