Mayor John Tory wants staff to take a closer look at a potential tax on commercial parking spaces as part of a wider assessment of new revenue tools that could help the city address its mounting fiscal challenges.

In a motion that will be considered by city council next week, Tory asks staff to complete “an updated assessment of revenue generating options” available to Toronto under existing provincial legislation.

Tory said that the review should include “an in depth feasibility study” of a commercial parking levy, including what impact such a tax might have on businesses and the city’s ongoing economic recovery from COVID-19.

The request comes as the city stares down a nearly $1 billion shortfall in its 2023 budget, largely due to the COVID-19 pandemic.

“While the remaining tools we have are limited in addressing the scale of the problem, I am recommending that we complete a revised study of revenue generating options available to the city under the City of Toronto Act and in particular complete an in depth feasibility study of the commercial parking levy,” Tory said in a statement accompanying his motion. “As we move forward it's important to consider all available tools in the context of feasibility, alignment with council directed policy objectives, and how such tools do or do not address substantial budgetary pressures faced by the city.”

A staff report prepared in 2016 previously estimated that if the city were to charge operators a levy of $1 per day, per parking space it could result in $300 million in annual revenue.

Staff, however, said at the time that the tax “disproportionately affects large malls” and would only bring in about $44 million annually if applied exclusively to paid parking lots.

In his statement, Tory said that what is really needed is “a new fiscal deal for cities.”

But he said that discussion with other levels of government should “informed by up-to-date information on the revenue tools that we have available” already.

In 2022, the City of Toronto had to postpone hundreds of millions of dollars in planned capital work due to a budgetary shortfall that resulted from the federal government not coming forward with funding to offset the city’s COVID-19 losses, as it did earlier in the pandemic.

“I am going to mount a crusade to get a new deal from these governments. Others before me have tried. But I am determined that we are at a point now where the stakes are high enough in terms of the social and physical asset deterioration we are seeing that it is in their interest to agree to a revised (funding) framework,” Tory told reporters during an unrelated press conference on Thursday morning. 


Tory has previously expressed reservations with parking levy

The public transit advocacy group TTCRiders has been calling on the city to implement a parking space levy for weeks now, saying that it could have already brought in $2.8 billion in revenue if it was implemented in 2016 when staff first studied it.

Tory, however, has previously been non-committal about implementing such a levy.

Last week he got into an argument with a resident at a skating party in Scarborough after being pressed for an explanation.

“Staff recommended against the parking levy by the way,” he said. “When staff last reported on a parking levy they recommended against it because it was very complex in terms of churches, malls and small business and so on so they recommended against doing it. What the staff also said is that if you were to set up something like that it would take one-and-a-half years to put all the administrative stuff in place (to actually generate revenue).”

The provincial City of Toronto Act currently makes a number of revenue tools available to the city which are not currently in place, including taxes on alcohol and tobacco.

The legislation also allows for a vehicle registration tax, similar to the one Toronto scrapped in 2011. Staff said in a 2021 report that reviving such a tax could bring in an additional $18 to $94 million a year, if set at $20 to $100 per vehicle.

Toronto is allowed to implement road tolls with provincial consent, however in 2017 the then Liberal government vetoed a decision by Toronto City Council to toll the Don Valley Parkway and Gardiner Expressway.

At the time, Tory expressed frustration with that decision, calling it “paternalistic and shortsighted.”