Toronto's land tax increases by 6.9% in 2025! City Council cancels Tesla taxi subsidy
The Toronto City Council voted on Tuesday to approve Mayor Olivia Chow's 2025 municipal budget, which includes a 6.9% tax hike to support an operating budget of $18.8 billion and a capital plan of $59.6 billion.
The budget includes a 5.4% increase in local taxes and a 1.5% increase in urban construction funds, totaling 6.9%.
This latest tax increase follows last year's 9.5% tax rate hike, marking the largest increase since the Toronto merger.
Zou Zhihui submitted her second budget as mayor and warned, "This is a critical juncture for all of us." She mentioned that years of insufficient funding and neglect have led to the current predicament.
Zou Zhihui told reporters before the meeting that "living in Toronto has become increasingly difficult for a long time. Rent is too expensive, subway malfunctions occur frequently, too many children go hungry, and the response time of police and emergency personnel is too long when citizens need it the most.
The budget includes funds for expanding food programs, extending the opening hours of public swimming pools and libraries, increasing park staff, freezing TTC ticket prices, increasing transportation management personnel, and providing wage increases for municipal employees in accordance with union negotiations.
Image source: CTV
During the deliberation process, some city councilors raised objections to tax growth exceeding the inflation rate, arguing that it is not the only way for urban development. City Councilor James Pasternak pointed out that many projects in his district were completed while land tax growth was balanced with inflation rates.
However, Zou Zhihui emphasized that at that time, the municipal government could still provide funding for community infrastructure projects by reaching an "Article 37" agreement with developers, but this policy was cancelled by the provincial government in 2023.
Some other city councilors questioned whether it was necessary to raise such a high land tax.
They suggested that the city government take stronger measures to combat TTC ticket evasion in order to increase revenue.
City Councilor Vincent Crisanti said that some of his voters are frustrated with the continuously rising taxes.
He told Zou Zhihui in the parliament, 'They feel that this tunnel is getting longer and the future is becoming less visible.'.
He proposed a motion to reduce the growth of local tax by two percentage points by allocating funds from the reserve fund and reducing the expenditure of 1.3% in all municipal departments. However, the motion sparked heated debate in parliament and was ultimately ruled invalid by Speaker Francis Nunziata.
City Councilor Michael Thompson said, 'I have never seen a perfect budget, but at this point, this budget is indeed the most ideal budget of our time, able to respond to the real needs of the city.'.
As the budget manager, City Councilor Shelley Carroll pointed out that millions of dollars in efficiency improvements have been identified during the budget preparation process.
Carroll emphasized that the key to passing this budget is to restore the normal operation of the city.
Image source: CTV
Carroll said after the budget was approved, 'People's needs are already very clear. They want us to repair the damaged parts and fulfill the promises in the budget. We don't need to imagine new plans, but to repair this city, reduce traffic congestion, improve safety, and ease the cost of living.'.
What people need is a well functioning city that can protect their children and make their grandchildren willing to take root and develop their careers here
Carroll added that she plans to provide citizens with detailed information on where their taxes will be used.
She said, 'As the budget manager, one of my key focuses for the next year is to help citizens understand how to find this information and share it with the community. This way, when they invest according to our requirements, they can clearly see how these investments will work and jointly monitor whether the budget goals are truly achieved.'.
Zou Zhihui approves subsidy plan to exclude Tesla
City Councilor Brad Bradford proposed a motion to use reserves to reduce industrial taxes by 25%, but the proposal was ultimately rejected by 3 votes to 22.
The motion sparked heated discussions in parliament, with city councilor Paula Fletcher warning that such tax cuts could benefit US warehouse retailers such as Amazon.
Zou Zhihui stated that she will not support Bradford's motion, but she has proposed a motion to remove Tesla from the list of vehicles eligible for the $4.85 million electric vehicle rental subsidy program to encourage rental drivers to purchase electric vehicles.
When asked if this decision was related to the identity of Tesla CEO Elon Musk, Zou Zhihui initially did not respond directly. Musk is a close ally of US President Trump, who has been threatening to impose tariffs on Canada since taking office and signed an executive order on Monday imposing tariffs on Canadian steel and aluminum.
Zou Zhihui explained that this move will take effect on March 1st because the Tesla brand is "very popular" and she believes that the city government has "no reason" to subsidize the purchase cost of the brand.
Zou Zhihui said, 'People can still buy electric cars, but they can't buy Tesla. I don't see why the city government wants to subsidize Tesla's purchase cost.'.
When formally submitting the motion to the parliament, Zou Zhihui added, "The most effective thing we can do is to send a message to the President's right-hand man (Tesla CEO Elon Musk)
Zou Zhihui emphasized that this move will not affect taxi drivers who already own Tesla and participate in the program.
She also stated that the city government may announce more measures to address US tariffs in the future as part of the Toronto Action Plan.
The motion was ultimately passed by 20 votes to 4.
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https://www.cp24.com/politics/toronto-city-hall/2025/02/12/toronto-council-approves-mayor-chows-2025-budget-that-includes-69-per-cent-tax-hike-votes-to-eliminate-tesla-subsidy/