Media Advisory - Technical briefing for media on new City revenue options

    TORONTO, March 16 /CNW/ - Joe Pennachetti, Deputy City Manager and Chief
Financial Officer, will respond to questions from the media about a discussion
paper entitled "A Discussion of Public Policy Revenue Tools under the City of
Toronto Act, 2006" that will be presented to the Executive Committee on
March 26.
    The discussion paper, full report and backgrounder may be viewed at

    Date:        TODAY - Friday, March 16
    Time:        1:30 p.m.
    Location:    Committee Room 2, 2nd Floor, Toronto City Hall

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                 A Discussion of Public Policy Revenue Tools
                     under the City of Toronto Act, 2006

    The City of Toronto Act came into effect on January 1, 2007 and provides
    the City with new limited powers of taxation.

    This is a discussion paper only and makes no specific recommendations,
    nor will it provide any new revenues for the 2007 budget.

    The Act provides the City with revenue sources that will be directed by
    public policy and linked to city-building initiatives in areas such as
    transportation, parks and recreation, culture and to climate change

    The City of Toronto Act provides the City with a diverse set of tools but
    these tools do not provide the solutions required to permanently address
    Toronto's structural funding shortfall of more than $1 billion annually
    as identified by the Conference Board of Canada. Property taxes were
    never designed to support the services now being paid for by the City.

    In order to finance this shortfall, Toronto requires:
        -  the province to pay for provincial programs such as social
           services and social housing, and
        -  a permanent stable funding source that grows with the economy such
           as one cent of the GST.

    The potential new revenues provided under the City of Toronto Act will
    not provide the funding required to support transit. Toronto, as part of
    the Big City Mayor's Caucus of the Federation of Canadian Municipalities,
    has called on the federal government to develop a National Transit
    Strategy and deliver a permanent federal investment of $2 billion per
    year for transit.


    -  Public consultations with residents, stakeholders and businesses will
       take place prior to any new tax being implemented and then implemented
       only with the authority of Toronto City Council.

    -  The impact of any new potential tax will be reviewed for its effect on
       homeowners and local businesses and on the need for Toronto to remain
       economically competitive and an attractive tourist destination.

    -  The staff discussion paper was written based on a background study
       prepared for the City of Toronto by Hemson Consulting.

    -  Eight potential taxation options were reviewed:
        -  Alcohol (stores and licensees - restaurants and bars)
        -  Tobacco (cigarettes)
        -  Entertainment (movies, sporting events and live entertainment)
        -  Motor Vehicle Ownership
        -  Parking Tax
        -  Land Transfer Tax
        -  Road Pricing
        -  Billboard Tax

    -  Each tax was assessed based on several factors:
        -  Fit with the City's policy objectives
        -  Average household impact
        -  The time required to implement
        -  Administrative complexity
        -  Exportability to those from outside Toronto
        -  Vendors who would be affected
        -  Effect on the business community

    Revenue tools and average annual     Administrative Complexity
    impact per affected household
    within the mid-range of other
    jurisdictions - do not tally
    these numbers to arrive at a
    total per household, as it is
    very unlikely that all potential
    new taxes would be implemented
    by the City.

    Vehicle registration -
    $40 per vehicle                      Low; requires provincial cooperation

    Land Transfer -
    $1,750 per home when sold            Low
    @ 0.5% tax on sale price

    Alcohol -
    $70 (tax on store sales only)        Low (stores)
    $70 (licensee tax)                   High (licensee)

    Tobacco -
    $137 annually                        High

    Amusement - Annually
    $6 movies                            High (movies, sporting events and
    $15 sporting events                  performance)
    $12 performance

    Parking -
    No direct household impact,          Low
    parking lot owner pays

    Billboard -
    No direct household impact           Low

    Road Pricing
    $655 annually based on weekday       High; complex
    toll trip for one year


    -  The intent of this discussion paper is to help members of the
       Executive Committee understand the significance of the potential tax
       measures and to begin the discussions among members.

    -  Following Executive Committee's consideration and direction to City
       staff, there is a significant amount of work that must be completed
       before any new tax could be implemented. This work includes:

        -  Consultations with stakeholders and the general public
        -  Reports to Council with recommendations for implementation
        -  Discussions with retailers about the City designating them as
           vendors to collect taxes for the City
        -  Agreements regarding collection options and collection systems
        -  Identification of administration costs and staffing
        -  Trend monitoring and adherence to policy

    -  No new taxes will be implemented in 2007. The process to implement any
       new taxes would begin no earlier than 2008.

    -  It would be up to Council to decide whether, and to what extent, any
       new taxes will be implemented.

    -  It is important to note that if any new taxes are implemented, they
       will be in support of the City's public policy objectives.

    The discussion paper, full report and backgrounder may be viewed at

    For more information: Joe Pennachetti, Deputy City Manager and Chief
Financial Officer, City of Toronto, 416-392-8773

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For further information:

For further information: Media contact: Francine Antonio, City of
Toronto Media Relations, (416) 397-5318, (cell) (647) 224-8022

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