Mayor Tory’s remarks to the Toronto Region Board of Trade - Time TO Build - November 24, 2016
It’s good to be here with all of you, and I want to thank Jan and the Toronto Region Board of Trade for hosting me here today.
It’s good to be here with our City Manager, Peter Wallace, who I thank for his hard work and counsel, with many members of city council and with representatives of our tremendous city staff.
I am here because our city is growing and so are the needs of the people who live and work in Toronto.
For decades now, we have been underinvesting in almost everything and those under investments are having an impact on our residents and our city.
We all see it. We all feel it.
It’s hard to get around; congestion and commute times are choking our roads and our productivity.
Our transit system isn’t big enough for the current number of people it is expected to carry, leave alone the millions of additional residents we expect over the next 20 years.
We are a great city, where people want to live and work, but that means we have more pressure on our roads and transit and on the services we need.
And that’s not okay.
I came into office promising to be honest with the people of Toronto, to get this city moving, grow our economy and to make a greater effort to ensure that no one is left behind.
So I’ll be honest: If we are to achieve those goals we have to acknowledge that things we need, from transit to affordable housing, are not free.
Pretending otherwise is not responsible and it’s not fair to the people of Toronto.
And so, it’s time for decisive action.
But we have to do it the right way.
I’m not the kind of guy who is going to slash services or take away programs that people rely on.
And I’m not going to dramatically increase property taxes across the board. Our city needs to come together around a fair, effective plan to pay for new transit and take care of our citizens.
I am hopeful that my city council colleagues feel the same way.
And I am ready to lead.
First things first, we need to demonstrate to the people of Toronto that we’re going to spend their money wisely.
I take seriously my obligation to hold our government to account, to make sure we are asking hard questions and demanding real accountability, transparency and change, knowing at City Hall that is a responsibility shared by one mayor and 44 councillors.
This week, I outlined my plan to modernize the way government services are delivered – finally putting citizens first through a digital-focused, efficient approach that will see City Hall run more like the businesses led by many people in this room.
And that will produce savings in the millions each year.
I also indicated my intention to move forward with the next steps to contract out additional garbage collection east of Yonge Street, which will also save us millions of dollars each year.
I want the people of Toronto to see their government working hard for them, providing the services they need, in ways that make sense.
I want us to question why we have continued to do things the same way for decades, while empowering our talented staff and building a City government filled with passionate experts who have the tools and the technology they need.
But when it comes to our budget problems, modernization and efficiency are not enough.
The City of Toronto currently needs $33 billion to build specific projects over the next 20 years.
And let me be clear: we need to build them.
With a number that big, it’s easy to lose sight of what we’re actually talking about, so let me explain what that money is needed for.
First and foremost, Toronto needs to expand its transit network, taking it from the lines you see on the subway map today to a real network that includes the Relief Line, SmartTrack, the Crosstown East to Scarborough and the Waterfront LRT.
Traffic is a growing nightmare and the number one fix is to give more people transit options so they can get out of their cars.
If we are going to tame the traffic beast, especially in light of our expected growth, it means starting to collect funds today for crucially needed transit for tomorrow.
So we need to build more new transit.
We also have to invest in repairing and improving the system we have.
Over the next two years, the federal government has provided $840-million in funding for state of good repair work for the TTC.
But we have to match it.
Those are the rules. So we have to come up with our $840-million to get their $840-million.
This partnership will let us repair our subways, modernize our tracks, buy new buses and make our stations accessible to people in wheelchairs and with strollers.
This is a huge opportunity to improve reliability and accessibility. And the time to take advantage of this productive relationship with our new federal government is now.
Our list of unfunded projects also includes $250M for the construction of new or improved long term care homes across the city, places for our elderly citizens to live.
It includes affordable housing – an economic issue because we need people to be able to work and live in our city.
And because I have no intention of telling an entire generation of young people that they just can’t afford to live in Toronto.
And it also includes the city’s $330-million contribution to flood proof the Port Lands.
No flood proofing means no development, jobs and investment and that would be a massive lost opportunity.
These are big things to take on. These projects have big price tags. They are not free. But they will have a big, positive impact.
They will make our lives and our city better.
The people of Toronto know we need these things, city council knows we need these things – that’s why they were approved.
So the question remains, how do we pay for them?
I’m going to start by telling you what I believe to be the wrong way to pay for these necessities.
This morning, the City Manager released a report outlining all of the options we have to pay for these much needed investments.
And he noted that property taxes are not the right tool to pay for huge capital projects.
Property taxes are predictable, reliable and fair, which makes them an effective way for cities to pay for the day to day services we provide.
But to use property taxes to fund our share of this $33 Billion, we would need a massive increase in our property taxes year after year.
Property taxes were never meant to finance multi-billion dollar investments in transit and housing, and using them to do so would punish our residents and make home ownership even harder.
So I will not support huge increases in property taxes to finance these big capital projects.
I am also not going to support a return to a vehicle registration tax or a parking levy.
A parking levy would mean that we charge property owners for every parking spot they offer, paid or free, whether they own a shopping mall or a daycare, a funeral home or church or strip mall or a factory.
It would place an unfair burden on those property owners, while other kinds of commercial entities wouldn’t pay their share.
And we would have to create a new system to count, enforce and administer this new tax.
Many would just say, “Well, we’ll just exempt small plazas, churches, the industrial sector.”
But then you cut out much of the revenue you could produce, and you have a lot of pain, with no real gain.
I will not support the much discussed option of a sale or partial sale of Toronto Hydro.
The City is the sole shareholder of Toronto Hydro, and that is an investment I take seriously.
We need to build a robust energy system in Toronto, we need to invest in our infrastructure and our electricity grid, to support our city’s growth and that of our industries.
And I believe we have identified a practical way in which the City can help Toronto Hydro to make those investments and protect our dividend at the same time. Without a sale.
And that’s the course I intend to pursue.
There are no easy answers here. That’s the truth of this.
But I’ve looked at all the options, and I do believe there is a way to build the things we need, starting with transit so that we can meaningfully get at unacceptable levels of traffic congestion.
And I want to tell you the criteria I used to decide:
First, I asked myself, is it fair? Does it give people a choice?
Fairness includes looking at options that reduce the impact on Toronto residents by asking everyone who visits our city or benefits from its services to help shoulder a small part of the cost.
People say that Toronto’s population is approximately 2.8 million.
That’s true, at night, when the people who live here are home sleeping.
But by day, the number of people in this city goes up dramatically with all the people who come to work or to visit, all the while using the services paid for by Toronto taxpayers.
My third criteria was that there should be a positive impact for our city, measures that would produce more than just money.
And finally, I asked whether we could designate the money generated directly towards the things we need, so people know exactly how these new dollars will be spent and receive a transparent accounting each and every year.
I believe that road tolls fit all four of these criteria.
A road toll on the DVP and Gardiner Expressway of just $2 would raise the City of Toronto more than $200 million every year.
To achieve an equivalent amount from property taxpayers would involve an increase somewhere between 5 to 10 per cent.
Tolls are paid in cities around the world, places many of us have visited.
On the Gardiner and DVP, these tolls would be paid by those who drive in and out of our city as well as by our local 416 residents, sharing the burden among everyone who uses these city owned and financed roads.
Tolls have been shown to reduce travel times and ease congestion. And they also encourage more people to take transit.
The introduction of tolls in Toronto would happen just as our regional GO network and SmartTrack system expand and our local transit options accelerate – so that people will have a much broader range of transit options.
And the money raised through tolls would be directly invested in unfunded capital projects, starting with the expansion of our transit network.
Together with a half per cent levy on property taxes I announced last year, this money would be held in a separate infrastructure fund and not be a part of the City’s overall operating budget – so people have no doubt as to how it is being invested.
I will propose that this fund be overseen by an independent body and audited each year by the Auditor General.
This is fair. This is transparent. And this will help us to build things we need.
Of course, implementing a new system for tolls will take some time and we also have to address the gap in our operating finances, right now.
This year, we asked all of our divisions and agencies from the police to the library to identify 2.6 per cent in reductions to their operating budgets, to see if there are ways to do things differently, and set targets for our spending.
It has been a valuable exercise and it produced great insights and tens of millions of dollars in cost savings, but it also brought home to me just how much is at stake if we do not work together to get our city back on track.
We cannot keep squeezing services for a growing population from our property tax base alone. And we cannot cut vital services that mean so much to people.
That’s why I will also be supporting straightforward, sensible tax reforms to fairly produce some additional operating revenues so as to ensure we can continue to provide the services people need.
I will be calling for an end to our city’s vacant commercial and industrial property tax rebate, which subsidizes property owners for empty office space or boarded up stores across our city.
When it was first created this idea made some sense – it was a promise to help our businesses through recessionary times.
But the truth of the matter is that our city subsidized property owners to the tune of $367-million between 2001 and 2013.
And almost 50 per cent of those payments have gone to the owners of empty spaces in the downtown core, where property values are skyrocketing.
By eliminating this rebate, we can save up to $22M a year, and we can improve the vibrancy of our neighbourhoods from one end of the city to the other.
I also support making our city’s voluntary destination marketing fee a mandatory hotel tax at all Toronto hotels.
A hotel tax, used in most other major cities around the world, means that visitors to Toronto contribute to protecting the vibrancy and quality of life that has drawn them here in the first place.
Airbnb and other online short-term rentals will also pay this tax to make sure we level the playing field and allow for fair competition in this emerging sector just as we did for Uber and taxis.
A hotel tax can contribute at least $20 million to our operating budget each year, on top of funding Tourism Toronto and the great work they do.
In the absence of those two measures, we would have to increase property taxes another one and a half percent to achieve those revenues.
And so I will be recommending these two reforms to our Budget Chief, Councilor Gary Crawford for implementation in 2017.
And I will be asking the Province of Ontario for the range of revenue options that will allow us to best serve the people of Toronto.
My first order of business after becoming mayor in 2014 was to bring some civility back to City Hall and get people working together again.
That I believe I have done.
I also said I would try to address affordability in Toronto by focusing on the single biggest payment people make to the City: their property taxes.
I said increases would be held to the rate of inflation – a commitment I have met.
I have focused on making things more functional around City Hall, which is why I’m committed to bringing forward sensible modernization initiatives and innovations that have the support of councillors from across this city.
And I have put my mind to how best make this city more livable…
Today, I have a plan to make the most significant investment in transit and infrastructure in decades, to cut congestion and get this city moving.
It would see us toll the Gardiner and DVP and dedicate every single penny raised to build transit and fix our roads, and by doing so make a real difference on unacceptable traffic conditions and overcrowded transit.
This is what the public wants done. This is the way we get there.
Simply put, it’s time to build.