Item - 2025.EX20.7

The Executive Committee:

1. Received the report (January 14, 2025) from the Chief Financial Officer and Treasurer for information.

Staff presented preliminary guiding design principles of a commercial parking levy to Executive Committee in February 2024. Since that time, staff have completed targeted stakeholder engagement which provided impactful input and feedback, leading to  refined estimates and design scenarios for a potential commercial parking levy. Staff have also engaged with the Municipal Property Assessment Corporation (MPAC) throughout the year to determine an appropriate implementation approach and to develop a preliminary inventory for surface parking in the City.

Through this work, it has been made clear that in order to successfully implement a commercial parking levy and ensure it is applied fairly, consistently and clearly, MPAC's involvement is critical based on their unique service offerings. This includes access to property assessment data, support for technology upgrades, and ability to develop and maintain audit, request for reconsideration, and appeal processes. MPAC has indicated that their commitment to participate further in this work is subject to their Board's approval and may require engagement with the appropriate provincial government officials.

Staff are recommending that any consideration by City Council of an implementation plan for a commercial parking levy be deferred while engagement continues with MPAC on their potential involvement in supporting the administration of a possible levy.

During consideration of the City’s Updated Long-Term Financial Plan (LTFP), City Council directed staff to develop an implementation plan for a commercial parking levy, in direct response to the City’s financial needs. The LTFP identified a combined operating and capital pressure of $46.5 billion over 10 years. It also outlined opportunities to address these significant and unprecedented financial challenges, including expenditure reviews, new revenue tools, capital prioritization and intergovernmental funding required.

In the absence of sustainable intergovernmental funding or structural changes to the City’s fiscal framework, the City has limited options to implement new or expanded revenue tools and has focused on actions within the City’s direct control and authority to implement. With estimated revenue potential of $100 to $108 million annually, the commercial parking levy may represent a reliable and significant source of annual revenue to the City which could be used to sustain critical municipal services, including transit.

In parallel to work conducted on a potential commercial parking levy, City staff continue to advocate to the provincial government for access to permanent sustainable funding sources that grow with the economy, such as a portion of the sales tax. Staff will also continue to engage on this topic, while confirming MPAC's commitment to support implementation of a commercial parking levy, prior to Council's consideration of a detailed program design. Should the City receive confirmation from MPAC and the provincial government that they will support introduction of a commercial parking levy, staff will report back to City Council with a comprehensive implementation plan.