Media Releases

The time is ripe for the City of Toronto to implement taxes, says IMFG

November 23, 2016

Toron­to, ON – As cities like Toron­to face tough deci­sions about how to fund the com­plex and grow­ing demands on local gov­ern­ment, a new­ly released paper from the Insti­tute of Munic­i­pal Finance and Gov­er­nance at the Uni­ver­si­ty of Toronto’s Munk School of Glob­al Affairs argues that addi­tion­al tax­es are entire­ly appro­pri­ate and nec­es­sary for Canada’s major cities to con­tin­ue to thrive.

In the IMFG Per­spec­tives Paper (No. 15) released today, New Tax Sources for Canada’s Largest Cities: What Are the Options?, munic­i­pal finance experts Har­ry Kitchen and Enid Slack review the advan­tages and dis­ad­van­tages of a range of poten­tial new tax­es includ­ing income, sales, fuel, park­ing, road toll, and hotel tax­es. The paper, based on a longer report released ear­li­er this year, makes a num­ber of rec­om­men­da­tions:

  1. Deci­sions on pub­lic spend­ing need to be linked with rev­enue deci­sions, to cre­ate greater pub­lic account­abil­i­ty and pub­lic trust.
  2. The res­i­den­tial prop­er­ty tax is a good tax for local gov­ern­ment and there is room to increase it in most cities.
  3. Cities can­not rely on the prop­er­ty tax alone to fund the increas­ing and com­plex demands on local gov­ern­ments.
  4. User fees bring in nec­es­sary rev­enues and play an impor­tant role in alter­ing eco­nom­ic deci­sions.
  5. Per­son­al income tax­es have the poten­tial to gen­er­ate con­sid­er­able rev­enue for large cities.
  6. Cities should set their own tax rates, in order to remain account­able to tax­pay­ers.

“The chal­lenges fac­ing Toron­to and oth­er major Cana­di­an cities have been grow­ing steadi­ly over the last twen­ty years and yet the rev­enues avail­able to address them have remained large­ly the same,” says Enid Slack, one of the report’s authors. “Cana­di­an cities need access to more tax­es, to bring them in line with many large U.S. and Euro­pean cities.”

Access the paper


About the Authors

Har­ry Kitchen is Pro­fes­sor Emer­i­tus in the Eco­nom­ics Depart­ment at Trent Uni­ver­si­ty. Over the past twen­ty years, he has com­plet­ed more than 100 arti­cles, reports, stud­ies and books on issues relat­ing to local gov­ern­ment expen­di­tures, finance, struc­ture, and gov­er­nance in Cana­da. In 2013, he was award­ed a Queen’s Dia­mond Jubilee medal for pol­i­cy analy­sis and research con­tri­bu­tions to munic­i­pal finance, struc­ture, and gov­er­nance in Cana­da.

Enid Slack is Direc­tor of the Insti­tute on Munic­i­pal Finance and Gov­er­nance, and an Adjunct Pro­fes­sor at the Munk School of Glob­al Affairs at the Uni­ver­si­ty of Toron­to. Enid has been work­ing on munic­i­pal finance issues in Cana­da and abroad for 35 years. She has pub­lished books and arti­cles on prop­er­ty tax­es, inter­gov­ern­men­tal trans­fers, devel­op­ment charges, financ­ing munic­i­pal infra­struc­ture, munic­i­pal gov­er­nance, munic­i­pal bound­ary restruc­tur­ing, and edu­ca­tion fund­ing. In 2012, Enid was award­ed the Queen’s Dia­mond Jubilee Medal for her work on cities.

About the Insti­tute on Munic­i­pal Finance and Gov­er­nance (IMFG)

The Insti­tute on Munic­i­pal Finance and Gov­er­nance is a research hub and think tank that focus­es on the fis­cal and gov­er­nance chal­lenges fac­ing large cities and city-regions. It is locat­ed with­in the Uni­ver­si­ty of Toronto’s Munk School of Glob­al Affairs.

For more infor­ma­tion, please con­tact:

Sele­na Zhang | Man­ag­er, Pro­grams and Research
Insti­tute on Munic­i­pal Finance and Gov­er­nance, Uni­ver­si­ty of Toron­to | 416–978-2168