Toronto proposes property tax hike to pay for SmartTrack, other transit, report says

Some Toronto city councillors are blasting Mayor John Tory after a report released Monday revealed the city is ready to raise property taxes by at least 2.1 per cent to pay for SmartTrack and other transit projects something Tory promisedhe wouldn't do when he ran for mayor.

In areport released on Monday, the Transit Network Plan Update and Financial Strategy,the city andprovince have proposed terms for sharing the $7 billion costfor several transit projects in Toronto, with the provincial government pledging to provide $3.7 billion.

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The city will pay $2 billion for six newSmartTrackstations and theEglintonWest LRT. The report also includes $1.2 billion in assumed contributions by the federal government, and $470 million in assumed contributions fromMississaugaand the Greater Toronto Airports Authority.

The province is on the hook for infrastructure to support SmartTrack, while the city will handle operating and maintenance costs.

The city says it will shoulder some of costs through tax increment financing (TIF), development charges, tax-supported debt financing and other measures.

"A tax increase of 2.1 per cent is projected based on the city'spreliminarycapital cost obligation and assuming 100 per cent of TIF revenue is allocated for debt payment," the statement read. Assuming 50 per cent of TIF is allocated todebt payment, the rate goes up to 3.9 per cent.

The plan must still be approved by city council and Tory has called an emergency meeting of his executive committee for Tuesday to talk about it.

While running for mayor in 2014, Tory promisedthat he would not hike property taxes to pay for his signature SmartTrackplan and pay for it with TIF.

Ward 14Coun.GordPerks slammed Tory, calling the agreement "a real failure" that costs Toronto too much and benefits the city too little.

"We have an administration that says they aren't going to increase taxes, and on the other hand brings us a report that at a minimum is going to increase taxes substantially," he said.

"This is much less at a much higher price," he added. "What Mayor Tory callsSmartTrackis not what we're getting."

Ward 31 Councillor Janet Davis said "there is no real financing mechanism" in the report, which she said is "based on some very high level assumptions about development."

"It is a very shaky financial foundation for us to make a huge commitment like this," she told reporters Monday.

"We need more time. And the people of Toronto need to understand the contributions they and their grandchildren will have to make."

Mayor Tory welcomes agreement with province

Tory welcomed the agreement, calling it a "key step to introducing SmartTrack."

"This agreement means that after years of talk, indecision and delay, we are actually getting on with building the transit Toronto residents so badly need, through a partnership with the province that will mean faster timelines and lower costs," Torysaid in astatement.

Under the agreement, the Ontario government will pay$3.7 billion forinfrastructure that will support SmartTrack. The infrastructure is called GO Regional Express Rail (GO RER). That amount includes rail and track infrastructure, grade separations, electrification and fleet upgrades.

Ontario Transportation Minister Steven Del Duca said in a statement that the agreement is a "significant investment" in city transit and light rail transit (LRT).

"The agreement builds on the province's significant investment into Toronto, including $3.7B for GO RER that will be the foundation for SmartTrack," Del Duca said.

"This is on top of the province's investment of more than $10 billionfor Toronto transit, including the Toronto LRT projects, Scarborough Subway and the Toronto-York Spadina Subway Extension."