Building Magazine


Hit the brakes! Real estate associations oppose proposed parking tax

Barely out of the gate and already certain sections of Metrolinx’s proposed plan to improve transit in the Greater Toronto and Hamilton Area (GTHA) through dedicated funding has come up against stiff opposition. While many in Canada’s real estate industry support some efforts, a chorus of voices is speaking out as “greatly concerned” about the impacts of a new parking tax being considered by the Province of Ontario.

In response to the Metrolinx report, Real Property Association of Canada (REALpac) chairman Stephen Taylor said, “We support efforts by the government to improve transit. However, when it comes to funding, everyone should be treated equally and fairly. This parking tax unfairly targets only one industry.”

On 27 May Ontario’s primary transit agency, Metrolinx, issued a report to Ontario Premier Wynne outlining a plan – The Big Move – for a GTHA public transit build out. The plan proposes funding come from four new taxes including a new parking tax for off-street non-residential parking at an average rate of $.25 per parking spot per day. However, depending on how the new parking tax is implemented, some critics estimate it could increase operating costs from $4.00 to $7.00 per square foot depending on a property’s value, totaling $350 million per year.

Industry concerns over a new parking tax are predicated on these main assumptions:

  • A parking tax will have a negative impact on businesses and economic development in the GTHA;
  • A parking tax unfairly targets only one industry;
  • A parking tax is a hidden tax paid by the supplier of parking and their tenants and therefore has no impact on transit use behavior or environmental benefits;
  • A parking tax will be difficult and costly to implement and maintain;
  • A parking tax is double taxation, as parking spots are already taxed as part of the value of a property, contributing to property taxes paid;
  • Municipal bylaws establish minimum parking requirements;
  • A parking levy on free parking is a hidden tax payable by tenants of shopping centres, offices and industrial facilities and not by users. Therefore, it will have no impact on reducing congestion.

“We will continue to work with government towards improved and dedicated transit funding. Funding should be broad-based as everyone must contribute equally to solve our congestion problem. A parking tax unfairly targets a select segment of the economy which is grossly punitive and will do nothing to alter driving behavior,” said Patti Parente, International Council of Shopping Centres (ICSC) Chair of Government Relations.

The organizations and trade associations opposing the new parking tax represent well over $180 billion in assets in Canada and include; the 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).

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