This article was originally published in the Toronto Sun on May 16, 2020. 

The right time to keep a promise is all the time, but sometimes it’s especially important. That’s certainly true right now of Mayor John Tory’s promise not to raise property taxes.

Tory successfully campaigned on this promise twice. “Lower Taxes” was the slogan plastered to the podium for a speech when he decried property taxes as the “single biggest cheque” Toronto taxpayers were forced to write each year.

Tory broke this promise by introducing the city building levy, a disguised property tax hike that made life even more expensive in the city. He doubled down this past December, and council agreed to increase the levy to 10.5 per cent by 2025. 

But the arrival of COVID-19 has brought the economy to its knees. The Bank of Canada has stated that the “downturn will be the sharpest on record.” The Financial Accountability Office of Ontario reported that Ontario lost over 400,000 jobs in March alone. That marks the “largest monthly increase in the jobless rate on record.” Torontonians have not been immune from the job losses and business closures.  

Economists have warned that higher taxes could deepen the economic contraction.

Tory originally planned to extract $63 million out of taxpayers’ pockets with his property tax increase this year. Torontonians couldn’t afford this property tax hike before the COVID-19 crisis. They certainly can’t afford it now.

The mayor should – at the very least – rescind his property tax increase immediately.

Tory deferred property taxes by 60 days, but taxpayers who can’t afford their taxes now won’t be able to afford a higher bill in a couple of months.

The federal government’s Canada Emergency Response Benefit is paying out up to $2,000 per month. That doesn’t cover the average cost of $2,200 per month to rent a one-bedroom apartment in Toronto. About 30 per cent of rent due April 1 went uncollected, according to CIBC economist Benjamin Tal’s estimates. If tenants are struggling and can’t pay their rent, landlords will feel the pain too.

The coronavirus lockdown has impacted Toronto real estate investors in the short-term rental market as well. As of November 2019, Toronto had 21,000 AirBnB listings. Alex Dagg, the company’s director of public policy in Canada, said that over 60 per cent of hosts rely on AirBnB income to keep them in their homes. As for the state of the travel industry, he said that the impact of the current downturn dwarfs that of “the September 2001 terrorist attacks and the recession that ended in 2009.”

The fate of the housing market is unclear. What is clear is that Tory should not be tempting fate by threatening a bad situation with a burdensome tax increase. Toronto-based Veritas Investment Research Corporation president and CEO, Anthony Scilipoti, has suggested that if even two per cent of housing stock is listed for sale, the housing market could crash.

The commercial real estate market has been impacted too. Restaurants Canada estimates that half of the independent restaurants that have closed their doors due to the shutdown may never reopen again.

But Toronto restaurants have long been suffocating under soaring property tax rates. Le Select Bistro even started a petition that gained nearly 40,000 signatures after seeing its property taxes increase by 515 per cent between 2005 and 2020.

Nearly two-thirds of Toronto small businesses say they’ll have to close permanently within three months due to the COVID-19 crisis, according to a study conducted by the Broadview-Danforth BIA. For Toronto business owners, a property tax deferral during this time is simply not enough. But a rate increase? Unconscionable.

Tory was elected twice on a promise to keep property taxes low. He should have kept that promise. Now he needs to reverse the increase. Torontonians simply can’t afford it.