Not All Revenue Tools are Created Equal

For more than 6 years, TEA has been calling on City Council to invest in important environmental services. Before the last municipal election in 2014, we made it clear new revenues are necessary if we hope to get Toronto ready for climate change.

We are glad to see City Council is finally having the conversation about new revenue sources to help fund important city actions such as expanding transit and getting ready for climate change. This conversation will continue on December 1 when the Council’s Executive Committee reviews a list of potentially new “revenue tools,” including taxes and user fees.

But not all revenue tools are created equal.
Think of revenue tools like the tools in your toolbox. A hammer is great for hammering a nail, but it’s the wrong tool for cutting wood or screwing in a screw. Like the tools in your toolbox, you need the right revenue tool for the right job. If revenue tools are not used properly, they can end up doing more harm than good.
In choosing the revenue tools best suited for helping raise the funds we need to build a greener city, not all tools are appropriate. What makes a tool appropriate? Below are the three qualities we will look for:
  1. Revenue tools must promote positive action. We know how much something costs has an impact on how people behave. For example, if transit fares are too high, people won’t use transit. If cigarettes are too cheap, it encourages smoking. We need revenue tools that reward us for doing the right thing and put a cost for behaviour that is harmful.

  2. Revenue Tools must be equitable. The reality is that lots of people are against paying higher taxes, paying for new taxes or paying more user fees. That’s because many people simply can’t afford to pay more. They’re struggling right now to pay the rent and get enough food on the table. In contrast, other Torontonians have the means to pay higher taxes. New revenue tools should reflect this reality and be designed to reflect a person’s ability to pay. Put simply, those who can afford to pay should pay and those who can’t shouldn’t pay.

  3. Revenue Tools must be sustainable. The environmental challenges facing Toronto require ongoing, significant investment. For example building and operating transit requires significant capital investment and money to pay the bills to keep transit moving. As well, the investments needed in getting Toronto ready for climate change will be ongoing for at least the next generation. Any tool that does not provide ongoing, consistent revenue won’t help. Which means selling off valuable public assets is not the answer. That is one reason why TEA opposes the sale of Toronto Hydro and has joined to convince City Council not to privatize the increasingly vital public asset.
On December 1, City Council’s Executive Committee  will consider a staff report with recommendations about which tools City Council should adopt to deal with the funding challenges facing the City.
TEA will be evaluating these recommendations based on whether the tools are sustainable and equitable and whether they promote positive change. We will ask Council to support tools that meet these goals.