Mayor John Tory’s plan to hike taxes on property owners in an attempt to raise billions of dollars for transit and housing has been unanimously approved by the city’s executive committee and will now go to council as a whole for final approval.

The plan, which was announced last week, would increase and extend an existing levy on property taxes known as the city building fund.

The levy, first introduced in 2017, was supposed to max out at a cumulative increase of 2.5 per cent by 2021 but Tory wants council to approve additional increases of 1 per cent in 2020 and 2021 and 1.5 per cent in 2022, 2023, 2024 and 2025. That will add up to a cumulative increase of 10.5 per cent, which will in turn allow the city to borrow $6.6 billion to put towards affordable housing and TTC state of good repair work.

The proposal comes amid a time of increased fiscal pressures on the city with a recent review by Ernst and Young concluding that the city’s capital plan may be unaffordable given current revenues.

City council will also be asked next week to approve a new affordable housing plan that will require an investment of $8.5 billion, about one-third of which ($3 million) remains unfunded. The plan also relies on $14.5 billion in assumed funding from the other levels of government.

“We can’t on the one hand pass a transit plan and pass a housing plan, which I hope will happen this coming week, while at the same time not spelling out how we are going to pay for it,” Tory said prior to Wednesday’s meeting. “There a very limited range of options. We tried road tolls, we expected gas tax money but both of those ended up not happening at the hands of the provincial government so now we do have an obligation to act on our own.”

Tory told reporters on Wednesday that the city has been able to find $861 million in savings over the last five years but he said that ultimately “we need billions, not millions.”

In a letter to members of his executive committee prior to Wednesday’s meeting, he said that he has not made the decision to push for the levy increase “lightly” but has come to realize that the city has no other options.

“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 that we need to invest in the future of this city,” he wrote.

Homeowners will eventually pay hundreds more per year

Tory has contended that the 1.5 per cent increase to the levy in 2020 will only cost the average homeowner an extra $43 a year.

The impact, however, will be more significant once the increase is fully phased in.

Speaking with CP24 on Wednesday, a spokesperson for the Canadian Taxpayers Federation estimated that property owners will eventually pay an additional $300 on their tax bills every year due to the levy.

“It is pretty ironic that he (Tory) is saying that I need more money for affordable housing while jacking taxes,” Canadian Taxpayers Federation spokesperson Jasmine Pickel told CP24 on Wednesday. “It doesn’t make sense; it is already way too expensive to live here.”

Pickel said that by pushing through a double-digit increase to the city building levy, Tory is breaking a promise he made during the 2018 election campaign to keep any tax hikes to around the rate of inflation.

For his part, Tory has contended that without action the city will begin to “strangle itself” amid record growth.

“I think when people see the transit actually getting built; when they see the affordable housing units actually getting occupied they will understand what we did here and know that it was better than doing nothing. Doing nothing to me is not an acceptable option,” Tory said Wednesday.