This week seemed to be all about parking: Where we park, how much we pay when we park in the wrong place, and who pays the price of providing precious off-road real estate for parking. No doubt it will dominate the debate at the March City Council meeting in a few weeks. Here’s the lowdown on the parking conversations we’ll be having next month and later this year.
INCREASED PARKING FINES
On Tuesday morning, the Infrastructure & Environment Committee considered a proposal to increase the fines for many parking violations. Let’s take a look at what’s being proposed and why.
First off, enforcing parking violations isn’t about getting our hands on more cash. It’s about congestion and safety. Staff looked at which violations are most chronic and most impede the flow of traffic, and whether or not the corresponding fines reflect the severity of that violation. The goal of a fine is to set it at a level that will act as a deterrent. If successful, no one pays the fine because they stop breaking the law.
As part of this parking fine review, staff did a broad scan of fines and violation levels in other Canadian cities. Where we had a much higher incidence of violations, staff have recommended the highest fine possible. City Hall Watcher and Toronto Star columnist Matt Elliot pulled all the data into a handy chart, showing us what the fines are now, the highest rate in other Canadian cities, and the new rate being proposed for Toronto, effective August 1, 2024.
Click on the image to view a larger, interactive version of this chart.
I can’t stress enough how much these higher fines are about improving the flow of traffic and, in turn, everyone’s safety. When someone parks their car in the middle of a bike lane, they slow down about 1000 cars over the rush hour and endanger dozens of cyclists who now have to dart out into traffic. Similarly, if you pull your car up to a Tim Horton’s on a downtown street for just five minutes, you take out a full lane of traffic and force about 250 cars to go around yours. All of us have waited in a line of traffic to merge past an illegally parked car and it is beyond frustrating.
So, while there are new fines coming, let’s all do our best never to have to pay them. We want to keep traffic moving and keep all road users—drivers, cyclists, transit riders and pedestrians—as safe as they can be.
A COMMERCIAL PARKING LEVY
Given the information above, what we debated at Executive Committee earlier today will probably seem counterintuitive. On top of increasing the fines for illegal on-street parking, the City is contemplating taxing businesses for providing you with parking spaces off-street.
A photo of a parking lot at Sherway Gardens Shopping Centre.
This is known as a commercial parking levy, and Toronto has had the permission to charge one since the City of Toronto Act in 2006. It was already in use in Vancouver and Montreal followed a few years after, but here in Toronto we didn’t immediately take it up. It was deemed onerous to collect and, more importantly, not capable of generating enough new revenue to substantially fix our structural financial problem.
More recently, it’s come back into the conversation as both a climate policy tool and a revenue generator that the City already has the authority to collect. So why not go for it? I wish it were that simple.
This week, one of my Council colleagues from a downtown ward suggested that we don’t need a lot of study on this levy, as we could simply start by taxing the big malls with large surface lots. She was surprised when I pointed out the incredible inequity of this approach, both amongst businesses and Toronto consumers.
Commercial parking levies generally work by levying an additional tax on a business’s property tax bill (for ease of collection), based on the number of square metres dedicated to parking on the commercial property. You don’t charge it on a per parking spot basis because commercial landlords begin reconfiguring their lots to have fewer actual spaces, but don’t enforce cars parking in non-designated spaces on their private property. This leads to chaos in parking lots and serious safety issues.
In the report we looked at today, staff are proposing to spend a year taking very careful inventory of parking both downtown and in the inner suburbs, and simultaneously engage key stakeholders to create proper exemptions in the policy, such as for accessible parking spaces and shipping/receiving space. They would then prepare the levy to come into effect in 2025.
Staff estimate that the levy would collect about $100 million per year, maybe more. As Budget Chief, I should be over the moon about this potential new revenue, but I’m not. Here’s why:
The first reason is one that is very relevant to us in Don Valley North. Over time, shopping centre parking lots are being developed into housing, and not all of the parking will be replaced. Both of our big malls—Bayview Village and Fairview—have subway stations beside them which change the parking requirements as they proceed with housing development. As a result, we need to look at large surface-level parking lots as a shrinking revenue pot that we should not become too reliant on.
The second reason that I’m not over the moon about this parking levy has to do with Toronto’s Long-Term Financial Plan. I’m afraid that the discussion around this parking levy and the year it will take to implement is a big distraction from the most fundamental flaw in our municipal funding formula and the action we need to take to solve it.
A slide taken from the City Manager’s September presentation on the Long-Term Financial Plan.
The slide above is the clearest and most concise explanation of our city’s financial woes. We cannot fix our city with financial tools that do not grow with our economy.
Currently, we are entirely too reliant on property-based tools like property tax, land transfer tax and, potentially, this relatively flat and limited levy on parking lots. When our economy booms, these tools do not net us a single extra dollar. No amount of hunting for efficiencies can compensate for the fact that municipalities in Canada get nothing new when the economy is strong. I would much rather us direct the energy being spent on creating this parking levy toward securing tools that grow with our economy and have the potential to fundamentally change Toronto’s financial formula.
Third, I’m worried about the impact this levy will have on Toronto’s economy, particularly our small businesses. Fundamentally, this is another property tax on small business. As we continue to run impactful programs like the Main Street Recovery and Rebuild Initiative that aim to reanimate our neighbourhoods post-pandemic, we shouldn’t be adding financial hardship to the mom and pop shops that make our neighbourhoods vibrant and liveable. This is especially true for the small businesses in our suburban strip malls, where parking availability is both a regulatory requirement and critical to their success.
Lastly, and this is a big one, there is a direct financial impact on every Torontonian if this parking levy rolls out. We know that where the cost of this parking levy can be passed down to the consumer, it will be, particularly by big businesses like chain grocery stores. The last couple of years of inflation have taught us that many large businesses will likely attribute higher prices to “the new parking tax” but will raise those prices higher than they actually need to. Their profits and dividends will increase while hardworking Torontonians are stuck paying more.
My climate activist friends, and I do count them as friends, will say that a parking levy is about getting us out of our cars. That’s a laudable goal, but it simply dumps us all onto a transit system that is desperately underfunded and struggling as a result.
Instead of focusing on this parking levy, I would much rather see us fully engage in the business of working together with the Provincial and Federal governments to complete the New Deal discussions that have been incredibly productive for our city so far. We need to provide cities with the revenue tools that give us direct access to growth in our economy and access to income, instead of slicing and dicing how we tax property, over and over and over. As Budget Chief, this will continue to be my focus and I hope to see it become Council’s focus as well.