Proposed Parking Tax Harmful to Business, New Study Shows

A real estate and business coalition released a report detailing how businesses in the Greater Toronto and Hamilton Area (GTHA) could be the target of an expensive, complicated and unworkable new parking tax. The research report was developed in response to Metrolinx's proposed parking tax as a component of its strategy to finance its planned transit infrastructure. The report clearly outlines the harm to business and negative impact on competitiveness of business from a parking tax.
 
The research report is being presented today by the coalition to the Ontario Blue Ribbon Panel tasked with investigating how to fund Metrolinx's The Big Move.
 
The report outlines how the parking tax would significantly increase the operating cost for businesses and non-residential property owners by applying a levy on all off-street, commercial and retail parking spaces. It would be an additional tax on off-street parking and would apply to all businesses, big or small. Metrolinx has claimed the tax will influence the behaviour of motorists, however the study concludes that the cost of the tax will be borne by the business owners and not be transparent to drivers, and will therefore not have any meaningful influence on behaviour.
 
"The proposed parking tax by Metrolinx is a blow to businesses in the Greater Toronto and Hamilton Area, who already face a number of challenges," says Carolyn Lane, VP, Membership, Marketing & Communications of the Real Property Association of Canada (REALpac). "While we support greater investment in public transit, we believe that financing tools should be fair and transparent and not compromise economic growth of the business community in the GTHA."
 
The report titled Potential Economic Impacts of Proposed Business Parking Levy in the Greater Toronto and Hamilton Area was prepared by Altus Group Economic Consulting on behalf of a coalition of real estate associations including Real Property Association of Canada (REALpac), Building Owners and Managers Association Toronto (BOMA), International Council Shopping Centers (ICSC), Toronto Financial District Business Improvement Area, NAIOP Greater Toronto Chapter and The Building Industry and Land Development Association (BILD). Together, these organizations represent over $200 billion in real property investment and management in the GTHA.
 
The report demonstrates that the tax structure would be a poor choice for financing public transit investment. It highlights several weaknesses in the proposal including:
 
It is unlikely to reduce the number of cars driving to Toronto and GTHA businesses due to its lack of transparency to individual drivers. The additional costs will be paid by the property owners and  businesses, not drivers;
The revenue generated will not meet the Metrolinx target of $350 million;
It is double taxation. Property owners already pay property tax and this would be an additional tax;
It makes the GTHA economy less competitive because financial resources are focused on paying taxes and not investing in the local economy;
Is not transparent to users; and It's costly to administer - Vancouver launched a similar tax and withdrew it because of high administrative costs and limited benefits.
"The Business Parking Levy is a regressive tax that punishes business and reduces competitiveness, which will have a negative impact on the GTHA's economy", added Carolyn Lane.
 
To view the full report visit the REALpac website at www.realpac.ca > Advocacy > Submissions to Government > 2013
 

on October 15, 2013