A report released by a real estate industry coalition warns of the negative impact a proposed parking levy would have on the Greater Toronto and Hamilton Area (GTHA).
While it is only one of four funding models put forth by Metrolinx to pay for the next wave of regional transit projects under The Big Move, the parking levy has received significant attention and backlash from affected parties.
“(Originally), we thought it only applied to commercial paid parking facilities,” says Carolyn Lane, vice-president of membership, marketing and communications at the Real Property Association of Canada (REALpac). “But the levy, as proposed, is charged on all parking spaces, whether they are paid or not paid, used or not. And it applies to office, industrial, retail (and) hotel (properties), regardless of whether these locations are served by transit or not.”
If accepted, the proposal would see all non-residential property owners subject to a daily charge per parking space based on their current value assessment. According to Metrolinx, the cost would average 25 cents per space, per day.
In addition to the levy, Metrolinx is calling for an HST increase, gas tax and an increase to development charges.
Lane says that while the real estate industry applauds Metrolinx’s long-term outlook and vision, the parking levy would create problems for both property owners and those attempting to administrate it.
“You are going to have to inventory every single parking space, whether paid or not, and then you are going to have to assess their value and evaluate their tax,” she explains.
The coalition – REALpac, the NAIOP Greater Toronto chapter, the Building Owners and Managers Association (BOMA) of Toronto, the International Council of Shopping Centres (ICSC), the Toronto Financial District Business Improvement Area and the Building Industry and Land Development Association (BILD) – has gone so far as to call the levy “unworkable.”
The report highlights that Vancouver withdrew a similar levy due to its administrative cost and limited benefits. The city’s projected revenue from the levy was eventually covered by a “replacement tax” – essentially a dedicated property tax.
And while the motive behind Metrolinx’s parking levy proposal is to build and promote public transit for all Ontarians – it claims road congestion costs $6 billion per year in lost productivity – the report argues the levy’s lack of transparency will not lead to fewer drivers on the road.
The study concludes “the cost of the tax will be borne by business owners and not be transparent to drivers, and will therefore not have any meaningful influence on behaviour.”
It also argues the parking levy would amount to a double taxation. Property owners already pay a property tax, which is directly affected by the number of parking spaces on-site. This means property owners will essentially pay twice if a parking levy is introduced.
Lane says the real estate industry wants Metrolinx to propose a more fair and transparent tool to raise the necessary funds required. For example, a minor increase in corporate or payroll taxes could make up the difference. Either would be fairer than the parking levy since they would apply to all businesses equally, she says.
Daniel Viola is the online editor of Canadian Property Management and Building Strategies & Sustainability magazines. He is also the editor of Property Management Report.