Canada's Condominium Magazine
[highlight]New tax could increase business operating costs by $4–$7 per square foot, real estate industry fears[/highlight]
The first public opinion poll since the release of the Metrolinx investment strategy for funding transit expansion shows that the public doesn’t think much of the new taxes. Is anyone surprised to hear that? The Forum Research telephone poll showed that more people would support increased fees paid by developers and an increase in parking fees, but fewer like the proposed gas tax and HST increase. Support is higher, in short, for those measures that would be less likely to affect the individual in a major way.
Other important players, including the mayor of Toronto and the finance minister of Canada are not on board either. Rob Ford says he won’t support any of the Metrolinx plan; Jim Flaherty says he won’t allow a 1 per cent hike in the HST.
And today some heavy hitters in the real estate industry weighed in. They say they are opposed to the Metrolinx proposal that had the highest support in the Forum poll: the parking tax. The poll showed 43 per cent support—not exactly overwhelming, but higher than for any of the other measures. But the real estate industry says the parking tax is unfair. According to their press release, the real estate groups that oppose this parking tax represent “well over $180 billion in assets.”
As understood at this time, the so-called variable parking levy would affect off-street non-residential parking. It would cost a business 25 cents per day per parking space, and would be tied to the assessed value of the property. Businesses in areas where land assessment was higher would pay more, but the average would still be lower than what is paid in other cities that use this form of tax. Metrolinx estimates that the GTA parking tax could raise about $350 million a year.
The spokesman for the real estate industry, Stephen Taylor, chairman of the Real Property Association of Canada (REALpac), said that his industry supports efforts to improve transit in the regions, but “everyone should be treated equally.” It could add from $4 to $7 per square foot to a business’s operating costs, depending on how the tax is implemented, the industry says.
Their objections to the parking tax include:
- its negative impact on businesses and economic development in the GTHA
- its unfair targeting of only one industry
- the fact that it’s paid by the suppliers of parking and their tenants and therefore has no impact on transit use behavior or environmental benefits
- its difficulty and high cost of implementation and maintenance
- the fact that it taxes parking spots that are already taxed as part of the value of a property
- the fact that it is payable by tenants of shopping centres, offices and industrial facilities and not by users, therefore having no impact on reducing congestion
There are more than 4.1 million non-residential off-street parking spaces estimated in the GTHA, Metrolinx says, most of them being surface parking. This adds up to 125 square kilometres of paved land dedicated to “storing cars.” In its justification for the parking tax, Metrolinx says that the levy would encourage businesses to provide only the amount of parking that is needed, while at the same time allowing business owners to contribute to the building of a better transportation network, which would, ultimately, decrease their reliance on parking.
A Business Parking Levy would provide a direct means for businesses across the region to contribute to the transit and transportation system that would benefit them in terms of improved efficiency and reliability. And because a Parking Levy would be applied based on the relative market value of parking spaces across the GTHA, contributions would be equitably distributed across commercial property owners in the region.
The organizations and trade associations opposing the new parking tax include; the Real Property Association of Canada (REALpac), the Building Owners and Managers Association Toronto (BOMA Toronto), the International Council of Shopping Centres (ICSC), the Commercial Real Estate Development Association – Toronto Chapter (NAIOP), and the Building Industry and Land Development Association (BILD).