Mississauga Mayor Bonnie Crombie and the leaders of 443 other Ontario municipalities say they desperately need it. Almost half of Toronto councillors agreed. Toronto Mayor John Tory used to seem open to the idea but is now brushing it off.

A municipal sales tax, either standalone or added to the 13-per-cent harmonized sales tax, could, according to experts and a city-funded study, pump a half-billion dollars a year into the repair and expansion of Toronto’s strained, stunted transit system and crumbling social housing units.

Advocates acknowledge new taxes are unpopular, politically risky and difficult to implement. But, they say, the payoff from a sales levy, even after implementation costs and exemptions to minimize the blow on low-income residents, would be transformational for cash-starved governments and the residents they serve.

“Something has to give,” Crombie said in an email to the Star, adding “you can’t build a 21st-century city with a 19th century tool” — property taxes.

“I join every other municipal leader in asking, if not this, then what? How do we close the fiscal gap that we face? Ad hoc funding that’s subject to political change is not sustainable and doesn’t allow us to plan for our future five, 10 and even 25 years out.”

No Canadian cities have their own sales tax. Vancouver residents in 2015 rejected, in a referendum, a .5 per cent levy to funding transportation projects. Americans are more accepting of the idea. New York City alone earns more than $7 billion U.S. from its retail tax.

The Association of Municipalities of Ontario, representing local governments outside Toronto, last year started pushing the Ontario government to grant its members sales tax powers. AMO wants a province-wide 1-per-cent tax that would generate an estimated $2.4 billion a year, including $478 million to Toronto, for local infrastructure including roads, bridges and transit.

A 2016 City of Toronto-commissioned KPMG report on proposed “revenue tools” to help make city finances sustainable and attack $33 billion in unfunded capital needs, called a sales tax a “strong option.” “It has the potential to broadly distribute the impact across different consumer groups and taxes both residents and non-residents” with “strong revenue potential that has shown to be more stable than other revenue options in both growth and volatility.”

The report forecasts annual net Toronto revenues ranging from $124.9 million with a .5 per cent tax, to almost $516 million with a 2 per cent tax, while warning that trying to piggyback on the federally administered HST could be complex to the point of not being viable.

Oakville Mayor Rob Burton says a sales tax “reduces if not eliminates the constant pressure to always be increasing the property taxes.”

The road to a sales tax ends, however, at Queen’s Park and it appears to be a dead end. As an election approaches Premier Kathleen Wynne’s ruling Liberals the Progressive Conservatives and the New Democrats have all rejected the proposal that would require provincial legislation.

Toronto Councillor Josh Matlow tried, at Monday’s budget-setting council meeting, to get Toronto to join the fight.

His motion to simply ask the Ontario government to start giving municipalities in the Greater Toronto and Hamilton area a portion of HST revenues passed 38-4. But a follow-up proposal, asking the province to give the region sales tax powers specifically for transit and housing, with exemptions for items including groceries and diapers, failed 19-23.

Asked Tuesday why he voted for Matlow’s first motion but against the second, Tory, who plans to seek re-election this October, told reporters: “I just don't think that's the best way to make public policy” during budget deliberations. He said his plan to raise big revenue by tolling the Don Valley Parkway and Gardiner Expressway — at first encouraged by Wynne but later rejected when non-Toronto MPPs protested — came after “exhaustive study and debate.”

As CivicAction chair in 2013, a year before he was elected mayor, Tory applauded a Metrolinx proposal for new taxes and fees, including a one-cent increase in HST, to help fund transit expansion and decrease traffic gridlock. “It’s been decades in the waiting, and the time has come for governments to invest in a dramatically better way to move people and goods across the Toronto region,” he said at the time.

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In an interview Matlow, who plans to seek re-election as councillor, said the mayor needs to show leadership and push for a sales tax even if Queen’s Park is saying no and it might be politically unpopular.

“If we are serious about demonstrating real leadership and facing our challenges to provide the transit system people need, and the affordable housing for which almost 200,000 Torontonians are on a waiting list, we need to be courageous and we need to move forward with a revenue tool that actually brings in the funds necessary to do that job,” Matlow said.

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