Canadians know all too well what GST, PST and even HST stand for..Now Toronto residents can add ‘MST’ to that list after its city council is considering a municipal sales tax to stem a $46.5 billion budget hole over the next decade in what it is calling an “unprecedented fiscal crisis.”.In a staff report released Thursday, an MST was just one of 29 new tax proposals including a “municipal personal income tax,” a “downtown parking sales tax” (in addition to a parking tax), a “motor vehicle registration tax” and even a “vacant storefront tax.”.About 16 of the new taxes would require amendments to the city’s articles of incorporation, dating back to 1834..The report even goes as far as to propose new taxes on plastic cups and reusable bags. The only thing not being taxed is the air over Lake Ontario — if the proposed cannabis sales tax is excluded..The latter makes more sense given that the ‘Big Smoke’ is the most stoned city in Canada..“Although there has been considerable public debate over the years about whether the City of Toronto has a ‘revenue’ problem or a ’spending’ problem, the reality is that the solutions required must come from and address all aspects of the city’s finances,” the report reads..All told, the variety of new taxes — apart from old-fashioned property taxes and user fees — would raise anywhere from $2.9 billion to $6.8 billion per year if fully implemented. By comparison, a property tax hike would only add $500 million to city coffers.."There will be devastating consequences for the City of Toronto and the greater region and country without serious attention given to address the city's financial challenges," the report says. .The report, prepared by accounting firm Ernst & Young, said the problems “cannot be solved immediately but need to be addressed immediately” — within the next six months — to avoid a $1.7 billion shortfall in the 2024 budget year..By 2032, interest charges are expected to to eat up a third of the city’s operating budget..“These pressures will continue to grow each year and will become increasingly difficult to manage if left unaddressed. Like a car accelerating toward a crowded intersection, not applying the brakes early enough will have predictable and grave consequences,” it said..Predictably, the report blamed past councils, previous provincial and federal governments circumstances — pandemics — “far beyond the city’s control.”.Release of the report was expedited by incoming Mayor Olivia Chow after her election in June..City officials, predictably, issued a plea to the province and feds for help..“We need something that's a game changer," City Manager Paul Johnson told a media briefing. ."We need new deals, we need new ways of working with the provincial and federal government. There simply is not a pathway locally, that we can get to a stronger point of sustainability.”
