NOTTE: Toronto's car tax hits dead end

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After 19 years, it’s the end of the road for Toronto’s vehicle registration tax.

Premier Doug Ford’s 2025 budget will amend the City of Toronto Act and take away the city’s ability to tax the family car. This saves vehicle owners up to $94 million a year — the price tag if a $100-per-car tax was ever imposed.

Page 108 of the budget states: “Amendments would also remove the City of Toronto’s authority to implement a personal vehicle tax, bringing it in line with other municipalities.”

You might recall that former mayor David Miller lobbied Queen’s Park to give Toronto special taxing powers — beyond what any other Ontario municipality had. These powers were granted through the City of Toronto Act, passed in 2006.

Using this new power, city council introduced a $60 annual tax for every car registered in the city. The tax was in effect from 2008–11 and generated $48 million every year.

The tax was so hated, then-councillor Glenn De Baeremaeker called it “the most unpopular tax we’ve ever seen.”

The vehicle tax was a major issue in Toronto’s 2010 mayoral election. Rob Ford promised that if elected mayor, he would scrap it. And he did exactly that in his first legislative move upon taking office. And by the mayor’s side was his brother Doug, who was also elected to council that year and now serves as Ontario’s premier.

Since 2015, several councillors have brought forward at least eight separate motions to re-instate the vehicle tax. That’s a mind-boggling number and waste of council’s time.

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Critics will argue Toronto needs the money. But the numbers tell a different story. The vehicle tax generated $48 million annually. Compare that to the $7 billion in capital costs the province is now covering by taking over responsibility for the Gardiner Expressway and Don Valley Parkway. That is 145 times more than the vehicle tax ever brought in.

Why does this matter? Because for most Ontarians, the family car is not a luxury — it’s a necessity. A Nanos Research poll found that 83% of Ontarians say having a car is essential to their household. Whether it’s commuting to work, taking kids to school and activities, or caring for aging parents, the family car is central to daily life.

For nearly two decades, Ontario’s new car retailers have stood against the vehicle registration tax. In a city already grappling with high living costs, slapping a $100 annual tax would burden working families, small businesses, and commuters who rely on their cars daily.

Although the tax hasn’t been levied since 2010, it has remained on the books — and the potential for its return was one city council vote away.

But as Budget 2025 soon becomes law, none of Ontario’s 444 municipalities will be able to tax the family car.

Drivers and new car retailers can’t thank Premier Doug Ford and Finance Minister Peter Bethlenfalvy enough for steering Toronto’s car tax to a dead-end road – and keeping more money in drivers’ pockets.

— Frank Notte is the Director of Government Relations for the Motor Vehicle Retailers of Ontario representing 1,100 franchised new car and truck retailers.