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Ontario's finance minister cool to idea of municipal sales taxes

ONTARIO —Ontario's Finance Minister, Peter Bethlenfalvy, has expressed reservations about implementing municipal sales taxes, particularly regarding sharing sales tax revenue with municipalities across the province, including Toronto. This sentiment was conveyed during the Association of Municipalities of Ontario (AMO) conference in London. The context for this discussion stems from Toronto's financial challenges and its proposal for a distinct municipal sales tax, separate from the harmonized sales tax (HST), as a means to address an anticipated $46.5 billion budget shortfall over the next decade.

The proposal put forward by the city of Toronto involves implementing a one percent municipal sales tax on top of the existing HST/GST. While this approach aims to generate additional revenue to address the significant budget deficit, it requires approval from Premier Doug Ford's government. However, Minister Bethlenfalvy's response to this proposition was cautious, emphasizing that the government's current focus is not on tax increases due to the ongoing challenges faced by citizens.

The unprecedented financial crisis triggered by the COVID-19 pandemic exacerbated Toronto's financial difficulties. The proposed municipal sales tax, estimated to generate between $800 million to $1 billion annually, is seen as a potential solution to bridge the budget gap. However, this approach also requires implementing amendments to the City of Toronto Act.

While Mayor Olivia Chow's office has been receptive to revenue tools aligned with economic growth, the response from the premier's office highlights the importance of keeping costs manageable for citizens. The overall sentiment seems to center on the necessity of finding a balance between generating revenue and not overburdening the populace, especially in a time of economic recovery and uncertainty.



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