LAU: Toronto taxpayers are getting mugged

Article content

After raising property taxes 9.5% last year, Toronto Mayor Olivia Chow’s proposed 2025 budget raises property taxes by a further 6.9% this year. If approved by council, this would be an unjustified increase. The 9.5% tax increase in 2024 didn’t improve city services. On the contrary, by many important measures, the city’s taxpayers paid more but got less.

Take traffic and transit for example. According to a June 2024 poll, 42% of commuters said their commute lengthened compared to one year ago, versus only 12% who said the commute took less time, with the rest saying the commute stayed about the same length (the poll was of residents in the Greater Toronto and Hamilton Area, but the results would likely be similar for Toronto itself).

And had the poll been done in December, the results would likely have been even worse. Twice within a three-day span last month, the Toronto Transit Commission shut down its entire major subway line for an extended period during the morning rush hour. Police reported “crowds spilling onto the streets” at subway stations, and thousands of people abandoned their commutes on these two mornings or were delayed for hours.

The TTC’s interim CEO issued an apology, but the next week, parts of the main subway line were again shut down during the Thursday morning rush hour and trains were delayed for 45 minutes because a raccoon got onto the tracks. You would think with a 9.5% tax increase, Toronto would have enough money to stop a raccoon from causing morning rush hour transit chaos.

The whopping tax increase in 2024 didn’t make the city much safer, either. While the Toronto Police Service’s crime statistics show the total count for major crime fell annually — as auto thefts moderated from all-time highs in the previous two years — most crime categories saw increases. Homicides were up 16.4%, sex crimes were up 12.4%, robberies and thefts (excluding auto thefts) were up 5.4%, and assaults were up 5.2%. And that’s on top of increases in all these categories in 2023.

If Toronto was cash-strapped and needed higher taxes to fix these problems, it would be one thing. But not only did last year’s tax increase seem not to do much good, there’s plenty of fat for city hall to cut before it should even think about raising taxes.

For example, the city funds the following environmental programs: home energy efficiency subsidies, home energy loans, energy retrofit loans, circular food innovators funding, Indigenous climate action grants, neighbourhood climate action grants, youth climate action grants, eco-roof subsidies, urban forestry grants, pollination grants, high-rise retrofit improvement support financing, and sustainable development refunds. These sorts of subsidies tend to deliver nowhere near the environmental benefits to justify their costs, and should be scrapped.

Next, the city could save hundreds of millions of dollars by opening construction contracts to competition instead of restricting bidding to certain unionized companies. And while Chow said the 2025 tax hike would mean public swimming pools could open sooner and longer, there’s no economic justification for government to subsidize recreation. And that doesn’t just apply to pools — the city should stop foisting the cost of its money-losing golf courses onto taxpayers.

Finally, according to recent auditor general reports, at Toronto city hall there are software licences purchased but not used, procurement processes are not always followed, and the parks department has significant gaps in how it monitors its employees — among other things, an audit produced evidence that employees often take more than the allowable time for lunches and breaks.

Pay 6.9% more this year, after already getting hit by a 9.5% tax hike last year, while city hall wastes hundreds of millions of dollars and services don’t improve? It won’t show up in the aforementioned police-reported crime statistics, but Toronto’s taxpayers are getting mugged.

— Matthew Lau is an adjunct scholar with the Fraser Institute.