The city of Toronto’s renewed contemplation of its special revenue-generating powers has real estate industry advocates proactively calling for a role in any future discussions. In a letter to Toronto Mayor John Tory earlier this week, they underscored the “adverse effects on Toronto’s real estate environment” of measures such as a parking space tax and/or expanded levies through development charges or the municipal land transfer tax.
The CRE Industry Coalition — comprised of six associations representing office, retail and industrial properties, residential developers, downtown businesses and merchants — is responding to recommendations put forward for Toronto Council’s upcoming budget debate. If approved, a consultant would be hired to update the now nine-year-old report that first set out parameters for so-called revenue tools that the City of Toronto Act, 2006, gives the authority to implement.
The coalition, spearheaded by the Real Property Association of Canada (REALpac), asserts that the city’s commercial and industrial ratepayers are currently overburdened and underserved, and presses for the real estate sector’s inclusion in “a thoughtful, transparent and fair stakeholder engagement process” as part of any study of revenue tool potential. The Feb. 8 letter also reminds Tory and his executive committee of the industry’s substantial contribution to Toronto’s economy.
“Toronto has a 4:1 commercial-to-residential property tax ratio, one of the highest ratios, as well as overall rates in Canada. Toronto’s development industry is subject to application fees, development charges, ‘Section 37’ payments, parking and cash-in-lieu schemes and a variety of other financial hurdles,” the letter states. “Compounded with regulations, which add costs in terms of time and red tape, real estate investment is a high-cost, high-risk endeavour. Any future conversations about revenue tools that may affect our overburdened industry should be carefully considered and in conjunction with our industry representatives.”
Notably, in 2013, the Ontario government rejected a special levy on non-residential parking spaces as a means to help finance public transit projects and, instead, committed dedicated funding from the provincial treasury. The coalition urges Toronto council to likewise avoid targeted tax that would penalize selected segments of the economy.
“Our coalition was pleased to partner with provincial policy makers in identifying fair, reasonable and effective funding options then, and we would be happy to work collaboratively with the City now,” the letter advises.
Other coalition members include the Building Owners and Managers Association Toronto, NAIOP Greater Toronto, the International Council of Shopping Centers, the Building Industry and Land Development Association and the Toronto Financial District Business Improvement Association.