Toronto’s Budget: Exposed

I found an article that explains the budget of the city using a series of graphs. It is quite interesting, actually: because it illustrates why Toronto is so expensive. It compares cities of approximately equal size in North America, especially in the States. There was a time that I used to brag that Canada was more concerned about its poor and the downtrodden than our American neighbours: although this may have been true at one point, it is certainly not today. As the largest city in Canada, Toronto is known as a haven for those who are “down on their luck”. This is part of where the expense comes from, and the differences in who supports that cost mean the average resident bears the burden to a heavier degree than most cities:

  • Toronto has property taxes twice as high as its American neighbours. So it’s not only expensive to buy a house here (the property values are five times what I knew in Little Rock) but it’s expensive to own a house here. This is the big reason most people notice the cost. For most cities, the urban costs are not just borne by people who live there. Since everyone must live somewhere, this affects us all and is a fairly non-discriminatory tax.
  • The federal government pays one quarter of what our American counterparts pay. Thank you, Mr. Harper. So after causing all that ruckus and difficulty during the G-20 a year ago, the federal government is unwilling to support the actual location that housed those dignitaries. No wonderful the federal government is doing so well. As the article says, “we have a federal government that is seemingly unwilling to provide municipal funding”. If we just got the feds to pay their part of our budget it would help to pay a lot of the shortfall. (And, of course, this is on top of the fact that the federal government now collects sales tax from the purchase of a house in the city.)
  • Sales tax is nonexistent in Toronto, while accounting for over 10% of the budget in other cities. Sales tax, as the name implies, is a tax on that which is bought and sold. The more you buy, the more you pay in tax. A decent sales tax would, then, put more of the burden for city services on those who benefit most from it: the rich. If we moved half the property tax (which is paid by everyone: even those who don’t own pay it through their rent) to a progressive sales tax it would take the burden off the average citizen.
  • “Other taxes” are one seventh in Toronto what they are in other cities. Part of this is the “Municipal Land Transfer Tax” which adds to the cost of buying property in the city: but is only a one-time tax. I can’t help but wondering if the lack of these “other taxes” is disproportionately favourable to businesses, which commonly buy and sell land as a method of transferring capital.
  • Toronto collects only half of the “other revenue” as our American counterparts. Like the taxes, I can’t help but wonder how much this “other revenue” would come from businesses, which are currently part of the city’s “hot” economy.

When Rob Ford “promised” to help the budget situation (and was elected on that promise), there was more than one option: but all he wanted to do was to cut city services. If he chose to increase revenue from other sources, he would have fulfilled his election promise and not irritated so many of the citizens of the city. Turns out there wasn’t as much “gravy” as Mr. Ford thought there was. But as I’ve said in other posts, Mr. Ford had one perspective: and cutting those services will essentially rob the city of its character. We trusted our mayor to listen to his constituents, and he has refused to do so.

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One Response to Toronto’s Budget: Exposed

  1. Summer says:

    Hey there, interesting post, thanks for sharing!

    My name is Summer and I am the social media coordinator at Atomic Reach. We are a publishing platform for bloggers and companies and I am currently building an Ontario politics community. Would you be interested in sharing your articles with other like-minded bloggers? Please feel free to send me an email for more details at summmerluu@atomicreach.com.

    Thank you and I hope to hear from you soon!

    Sincerely,
    Summer

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