The City of Hamilton will look at the possibility of new taxes to help deal with a serious cash crunch expected in the coming years.
Coun. Maureen Wilson put forward a motion at a meeting this week asking staff to look into the feasibility of more parking levies, a tiered land transfer tax and alcohol and tobacco sales taxes.
The motion passed 10-4 on Wednesday and directs staff to report back by the end of the year on how each revenue source could be put in place and if other municipalities are considering similar measures as they’re faced with increasing infrastructure and social service costs.
“How can we better build out the health and sustainability of our wonderful city?” asked Wilson at the general issues committee meeting. “We can do that, in part, by achieving long-term sustainability and stability of our city’s finances.”
Hamilton councillors and staff are among municipalities across Ontario demanding what they call “a new fiscal framework” from the provincial and federal governments. They argue that with increasing costs locally, cities need more reliable funding and more tools to bring in revenue other than property taxes.
City spending on homelessness unsustainable: staff
Hamilton, for example, is facing an increasing homelessness crisis despite council pouring in over $200 million this year alone to create more shelter spaces, affordable and supportive housing and programs to protect renters from eviction, Wilson said.
That pace of spending, with a chunk coming from reserves, is “not sustainable,” said Mike Zegarac, general finance manager.
Even with that spending, the city’s emergency shelters remain perpetually full and the number of people living in tents appears to be at an all-time high — increasing from 150 last summer to over 200 this spring, said Michelle Baird, housing services director.
Coun. Cameron Kroetsch, whose downtown ward is home to many of the city’s encampments, said in response that the city currently “has no capacity to solve homelessness. We can only manage it.”
The province and federal governments have recently committed tens of millions of dollars to assist Hamilton in coping with the crisis, Kroetsch acknowledged, but said it’s not nearly enough.
“This is not a million dollar problem. It’s a billion dollar problem.”
Following Toronto’s lead
The alternative revenue sources staff will consider through Wilson’s motion have been considered in Toronto.
Last year, under Mayor Olivia Chow, council passed increases to land transfer taxes on “luxury” homes valued over $3 million. They also removed the $5/hour cap for on-street parking and are planning on introducing a commercial parking levy.
The City of Toronto also has the power under Toronto-specific provincial legislation to introduce sales taxes on alcohol and tobacco, but would require extensive resources to implement, according to a staff report from last year.
Wilson’s motions to explore similar programs was backed by Mayor Andrea Horwath who said it was “incumbent” for them to look at all options.
“We may not implement all options, but certainly head-in-the-sand is not the way to go,” Horwath said.
The councillors who didn’t support the motion were Tom Jackson, Jeff Beattie, Mike Spadafora and Matt Francis.
“This council does not need a new tax,” Francis said. “This council needs fiscal responsibility.”