December 09, 2015

Watch your wallets, urban Albertans: City charters meant city taxes in Toronto

Paige MacPhersonAlberta CTF Director

(This op-ed by Paige MacPherson, CTF Alberta Director, Amber Ruddy, CFIB Alberta Director and Stephanie Kusie, Common Sense Calgary Executive Director was originally published in the Calgary Herald on Saturday, December 5, 2015.)

In mid-November, Premier Rachel Notley was given the chance to end a long-held belief that her government is considering giving Alberta’s big cities historic new taxing powers. Instead, she refused to rule out granting new tax powers to Alberta’s big cities.

She said discussions with the mayors of Calgary and Edmonton about big city charters hadn’t yet reached that point, but has welcomed the big city mayors to meet with the entire NDP cabinet in January.

Adding fuel to the tax fire, just days before Calgary City Council discussed city charters behind closed doors in an in-camera meeting.

Once again, Alberta taxpayers and businesses are left out of the discussion, despite the fact that they’ll be the ones to pay the bill if Calgary imposes a city sales tax or Edmonton slaps on a city gas tax.

We know what city charters mean because this isn’t the first time we’ve seen them in Canada.

Less than a decade ago in Toronto, city charters were billed in much the same way they’re being floated here: to give the city more autonomy and independence. What city charters really meant for Torontonians was a heavier tax bill.

Toronto law firm Aird Berlis LLP wrote a brief titled "Toronto’s New Taxes" after city charters came into play. The language is eerily similar to here in Alberta.

“The City of Toronto Act … provides what is truly a significant and exclusive power to the City of Toronto – the power to impose direct taxes,” it notes. “Anticipating negative public reaction, the new taxation powers are commonly referred to by the City of Toronto in all staff reports, media pronouncements and city-generated literature as ‘revenue tools’ rather than ‘taxes’.”

Sound familiar? Call it a revenue tool, a charter, a levy or a fee. It’s a tax.

After receiving the new tax powers in 2006, Toronto immediately imposed two new taxes on residents: the land transfer tax and the vehicle registration tax.

Both taxes were so wildly unpopular that just four years later, scrapping the taxes was among the most prominent planks of former mayor Rob Ford’s massively successful 2010 mayoral campaign.

Ford followed through and eliminated the vehicle registration tax. In 2009, Toronto again used its "city charter" tax power to vote in a billboard tax, which was met with controversy and legal challenges.   

The major "tool" that Alberta’s cities have at their disposal already is the power to impose property taxes. Property taxes have been rising dramatically in both Calgary and Edmonton, with a 3.5 per cent increase in Calgary and a 3.4, then 3.4, then 4.8 per cent increase for the next three years in Edmonton. Mayors Nenshi and Iveson have both lamented the regressive nature of property taxes.

You might think the mayors’ penchant for decrying property taxes means they’d be eliminated or decreased if the cities received new tax powers – but you’d probably be wrong. Neither of the mayors have committed to this. In Toronto, property taxes did not drop with the introduction of new city taxes.

In October, then-Alberta Municipal Affairs Minister Deron Bilous said the mayors hadn’t yet asked for new tax powers. The See Charter, Think Tax coalition responded by calling on Alberta’s big city mayors and premier to confirm that by signing a pledge promising they wouldn’t introduce new city taxes.

Not one of them agreed to sign the pledge.

And now with Premier Notley again refusing to rule out new taxing powers for municipalities, it’s little surprise the pledges remain unsigned.

The mayors and our premier seem happy to drag this out. Each time they’re asked about new taxing powers for municipalities, they dodge the question. Meanwhile the march towards city charters continues.

We should learn from Toronto’s example. There is little question city charters will mean new tax powers for Alberta’s cities, and more taxes for Albertans.

(See Charter, Think Tax is an Alberta-based coalition launched to demand taxpayers and small businesses have their say in any new city tax powers. The coalition is comprised of the Canadian Taxpayers Federation, the Canadian Federation of Independent Business and Common Sense Calgary.)

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commented 2015-12-09 21:04:01 -0500
Nutley is doing her best to destroy both the oil industry and the farmers. Her last place to hit are the cities. But considering that the cities were the only ones to vote for her, she’ll let the mayors do the damage instead. Good work Paige.