The Scarborough councillor believes Mayor Rob Ford could find a way to inject cash into his subway dreams by getting the city to ask the province for a 0.5% sales tax.
He estimates the tax would generate around $250 million a year — money he says would solely go towards subway construction.
“I think it is the fairest tax,” Kelly told the Sun Thursday. “Every buck would go into subways, every dollar, it would be a special fund, it would not go into general revenue.”
The veteran councillor and TTC commissioner argued a sales tax would be paid by anyone buying goods or services in the city — hitting Toronto residents but also 905ers, tourists and anyone else not paying property taxes.
“It spreads the tax base out and captures people right now who don’t make a contribution to the running of the city,” he said.
Kelly’s subway sales tax idea comes the same day Mayor Rob Ford suggested in a national newspaper op-ed that a “modest parking levy” could help the city “start building subways now”. Ford argued the levy would generate more than $90-million annually and fund a public-private partnership to build the Sheppard subway.
Kelly said a sales tax would be a “decisive, bold, statesman-like move”, but it would end the debate about the city’s rapid transit future.
“It’ll be subways and you’ll have the money to pay for it,” he said.
Earlier this month, council voted to derail Ford’s transit plan that buried the Eglinton LRT across the city and pushed for a Sheppard subway to the Scarborough Town Centre. Councillors, led by TTC chair Karen Stintz, endorsed putting the Eglinton LRT at street-level in Scarborough, reviving a light rail line on Finch Ave. and re-examining transit options for Sheppard Ave.
With a subway sales tax and other revenue tools, Kelly said the Eglinton line could stay underground, the city could build extend the Sheppard subway line into Scarborough and then build the Sheppard West subway line from Yonge to Downsview.
“Then we build Finch West and then we’d take the Scarborough RT from the Town Centre up into Malvern,” he said.
Budget Chief Mike Del Grande said he is concerned the amount of the subway sales tax could creep up over time and become lost in general revenue.
“I don’t like taxes for the sake of taxes however a sales tax would capture everybody and anybody that comes into the city,” he said.
The Scarborough-Agincourt councillor stressed Toronto’s transit system has fallen way behind.
“We had a great system in the 70’s but compared to other cities in the world, I don’t know why we didn’t go with incremental funding, just build a tunnel to the next station and build a tunnel to the following station,” he said.
“We lost about 30 years of momentum where we just stayed still.”
Stintz said Ford’s parking levy was news to her Thursday morning.
“The big question for Mayor Ford and what he needed to answer is how is he going to get his financing? It appears he is now wrestling with that question,” she said.
Councillor Adam Vaughan accused Ford of “making numbers up” when it comes to the parking levy.
“If he is prepared to bring a car tax forward, I’ll look at it and see what it does to help us build the right kind of transportation,” Vaughan said.
Vaughan said his position on what transit to build in the city stays the same.
“I believe that the plan council passed is the best plan for the city,” he said.
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