It’s been obvious for years that the City of Toronto needs to raise a lot more money to pay for transit, housing and much more. Lots of people — including us — have been banging the drum about this for a long time.

So we are happy to applaud Mayor John Tory for (finally) stepping up and proposing a significant increase in taxes to help pay for the needs of a growing city.

Tory, cautious as ever, is deliberately trying to undersell his proposal for fear of spooking city councillors wary of voters’ reaction to any tax hike.

The next city budget will keep increases in the basic property tax at or below inflation, he says. That’s the approach he has taken for years, and it’s a big reason why Toronto has been in a semi-permanent state of austerity despite its booming population and economy.

But to Tory’s credit he is now proposing a substantial increase in a special “levy” known as the city building fund. Instead of topping out at 2.5 per cent of property taxes in 2021, he wants to extend it through 2025 and raise it each year until it adds up to 10.5 per cent.

That would raise enough revenue for the city to borrow $6.6 billion to pay for pressing needs like transit and housing.

The proposal will go to city council on Dec. 17, and councillors should support it. Their biggest question should be: what took you so long?

There will be predictable howls from the far right that this is just another tax grab from the wastrels at City Hall. Cut the “fat,” they will cry yet again.

Anyone tempted to fall for that old line should have a look at a new report on city finances by consultants Ernst & Young. Far from accumulating useless fat, it finds, the city has actually been reducing its spending over the past four years. Real per capita spending on services has fallen — from $3,166 in 2015 to $2,976 in 2018.

That has translated into a serious squeeze on all sorts of services. Toronto hasn’t been able to keep up with basic needs, let alone act like the major metropolis it has become.

Ernst & Young recommends even more “efficiencies” in daily operations, but even if those are implemented it will add up to millions of dollars — not the billions the city needs to expand transit, build more affordable housing and get the social housing it has now into good repair.

That’s where the expanded city building fund comes in. The money is dedicated to much-needed capital spending, making it more politically palatable to those who may fear that any extra taxes will be squandered at City Hall.

Importantly, it will strengthen the city’s hand when it turns to higher levels of government for more support. If Toronto can show it is leaning more on its own ratepayers, it will have a better case for the province and Ottawa to help out.

That’s particularly important considering that Toronto’s basic property tax rates have been kept at the lowest levels in the GTA. If Torontonians aren’t willing to pay their full share in their own city, goes the logic, why should other taxpayers chip in?

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It’s a reasonable question. But as the Ernst & Young report points out, Toronto bears all sorts of extra costs as the major population centre in the area. Housing, social services, refugee settlement, transit and transportation — Toronto ends up paying far more than its share, while having fewer sources of money to pay for it all.

Mayor Tory deserves credit for grasping this nettle at long last. It’s time for Toronto to face the fact that it can no longer get by on the cheap.

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