On Tuesday, January 28, Toronto’s Executive Committee will receive an update on the Commercial Parking Levy—a potential new revenue tool that could generate over $100 million a year in new funding for climate action, a better transit system, and other critical services. Unfortunately, the future of this tool is currently at risk due to corporate lobbying from multinational corporations like Shell and Walmart, and delays caused by the board of the Municipal Property Assessment Corporation, which is made up mostly of real estate and finance executives. City Hall is currently considering not moving forward with this revenue tool, along with another critical tool focused on Stormwater Charges. We cannot afford to lose these opportunities to fund a better city, and we need your help to take action and call on the City to save the levy.
Social Planning Toronto has been advocating for years for the City to diversify its revenue sources to properly fund, green, accessible and affordable housing, transit, and vital community services. For the past ten years, the City of Toronto has been studying a tool that can make big oil, big box stores, and large shopping malls pay their fair share towards funding infrastructure and improvements that build a better city, such as transit improvements, climate action goals, and other important community programs. The Commercial Parking Levy is a revenue tool that charges corporate landlords based on the amount of parking they have on their property. Cities across North America are using this tool to collect reasonable fees from big box and corporate landlords to fund transit, flood protection and other city services—all of which they benefit from. The Commercial Parking Levy is an invaluable tool the City should have at its disposal, and it is imperative that the City of Toronto be allowed to implement this tool as soon as possible, given the many challenges facing City finances. To help understand this pressing issue, this explainer will share everything you need to know about the Commercial Parking Levy and how to take action.
Our partners at the Toronto Environmental Alliance (TEA) and TTCriders have done some incredible work to push for this revenue tool and raise awareness about why it is so critical for Toronto. A special thank you to How-Sen Chong, TEA’s Climate Campaigner, for providing the research and data to support this blog post. For more information, check out TEA’s excellent backgrounder on the levy.
How Does the City Generate Revenue?
Revenue tools are a critical way to secure resources for communities and address much needed changes on a local and systemic level. Toronto is one of the wealthiest cities in North America, yet that wealth is not adequately redistributed to support the critical needs of equity-deserving communities. For example, Toronto currently has one of the lowest property tax rates in Ontario, despite it being one of the few tools the City has access to for covering the budget. To understand why this is the case, it is important to understand the relationship between the municipal, provincial, and federal government.
Cities across Canada are often described as “creatures of the province” because they have no inherent powers to create new policies and revenue tools unless they are granted that ability from the province, according to the Canadian constitution. For most cities, property taxes and user fees are their primary revenue sources, beyond the funds transferred from provincial and federal governments. The City of Toronto Act (COTA) has given Toronto a unique status to enact special taxes such as the Vehicle Registration Tax—which was axed in 2010 under former Mayor Rob Ford—and the Municipal Land Transfer Tax. That being said, there are still untapped sources of revenue that the City of Toronto can consider, such as the parking levy, without major regulatory or policy changes required at the provincial level. Tapping into this kind of revenue source could be a game changer for enabling much-needed investments in public transit, as well as addressing systemic issues such as climate change and wealth inequality.
What is a Commercial Parking Levy?
A commercial parking levy is a revenue tool that charges commercial property owners a rate based on the amount of land they have devoted to parking. Commercial parking levies are seen as a tool to take pressure off property taxes and fund critical services, programs, and infrastructure needs. It is a commonly-used revenue tool that has been implemented in major cities such as New York, Los Angeles, Chicago, Washington DC, San Francisco, Philadelphia, Montreal, Vancouver, and more. Montreal’s Commercial Parking Lot Levy has been active since 2010 at a rate almost ten times greater than what is being proposed in Toronto, and New York has had a commercial parking lot levy since the 1980s.
Source: Toronto Environmental Alliance (2025)
In Toronto, it is estimated that the City has approximately 22 square kilometres of surface parking area. For comparison, this amount of parking is roughly the equivalent to paving the entire area south of Bloor from Roncesvalles Ave to Sherbourne Ave. As an alternative comparison, this amount of parking is slightly larger than East York (21.26 km²) and slightly smaller than York (23.18 km²). Adding underground and above-ground parking garages to the tally of surface parking areas nearly doubles the total parking area in the City. In total, the City estimates that a commercial parking levy for this amount of parking could generate between $100 to $108 million annually. As proposed, it would cost approximately 1-2 cents per hour per spot depending on the location of the parking lot, and would only apply to large commercial parking lots. The proposed levy also has an exemption for the first 300 square metres of all properties, which is roughly equivalent to 10 parking spots, in order to not impact small businesses in strip malls.
What Are the Benefits of a Commercial Parking Levy?
A commercial parking levy would make a significant contribution to the City’s revenue and can also make great strides in improving transit services and advancing climate action. In September 2023, City Council directed staff to develop an implementation plan for a commercial parking levy, as part of their wider assessment of new revenue tools for the Long-Term Financial Plan. The guiding design principles of the commercial parking levy were released in 2024, with direction for staff to complete a comprehensive parking inventory and consultation to refine and finalize the implementation plan. After many years of advocacy by TEA, TTCriders, SPT and other partners, community groups have identified significant benefits that can be generated through the commercial parking levy—notably transit and climate action.
Improve Transit
As TTCriders argues, big box stores and large shopping centres benefit from TTC access without paying into the TTC. The funds raised through a commercial parking levy could significantly impact the quality and service of our underfunded public transit system.
So what could be achieved with an additional $100 to $108 million in the budget? One example of a program that these funds could support is fare capping. Fare capping is a program that allows transit users to ride free after a certain number of rides in a day, week, or month. A capping program would allow riders to pay-as-you-go as opposed to paying a large sum up front (like a monthly pass), which can be inaccessible for low-income riders and people living paycheque to paycheque. According to TTCriders, other transit agencies in Edmonton, Hamilton, and York Region have fare capping, and the TTC Board has endorsed fare capping in principle in 2022 in its 5-year Fare Plan. As identified by TEA, if the TTC established a fare cap so that TTC riders pay no more than 40 fares a month (costing roughly $35 million to implement the program), this would still leave an additional $65 to $73 million from the levy to fund TTC operational costs like 6-minute service on all streetcar routes, 10-minute or better service on more bus routes, and an earlier start to bus service on Sundays.
Advance Climate Action
Beyond creating a valuable revenue tool, the Commercial Parking Levy can also significantly impact climate action goals within the City. The tool is seen as an impactful way to increase transit ridership and reduce congestion by providing much needed investment into our transit infrastructure. According to TEA, if we want to meet Toronto’s TransformTO goal of net zero emissions by 2040, we need better transit service and lower fares. To meet this commitment, 75% of all trips under 5 km should be walked, biked, or on transit—a goal that cannot be reached without funding to improve service and offer a viable alternative to cars.
Commercial parking lots contribute to significant challenges in Toronto’s efforts to mitigate climate change. As many Torontonians remember, the City experienced extreme rainfall in July 2024 which left many neighbourhoods flooded and without power. The floods impacted all Torontonians but posed extreme risks to seniors living alone, people with disabilities, people living in basement apartments, and people who are unhoused or precariously housed. According to a recent City-led assessment on stormwater charges, large paved surfaces contribute significantly to the amount of stormwater runoff that overflows into the City's sewer system, instead of absorbing it into the ground. Stormwater also picks up oils, grease, fertilizers, bacteria and other contaminants as it runs off hard surfaces, which impacts the water quality of Toronto’s rivers, streams and waterfront.
In 2024, the consultations for the commercial parking levy were tied to the City’s exploration of a stormwater charge for industrial and commercial properties, which could be reduced if property owners make their paved areas greener and more permeable to mitigate future flooding. Now, both revenue tools are being stalled at City Hall.
So What’s Holding Us Back?
The Commercial Parking Levy and the stormwater charge—two key revenue tools that could help address climate change and transit—are currently being contested at the City by corporate lobbyists, such as big oil and big box stores. The commercial parking levy is also being stalled by the board of the Municipal Property Assessment Corporation (MPAC), an unelected body made up of finance and real estate executives.
Corporate Lobbying
Many organizations and corporations have paid staff who connect directly with members of council to influence public policy; this process is called lobbying. According to the City’s lobbying records, major corporate groups from big oil, like Shell Canada, and big box stores, like Walmart, have been pushing back on the Commercial Parking Levy. These multinational corporations make billions of dollars in profits, yet they are arguing that the implementation of the fee will lead to increases in retail prices rather than redirecting their profit to significantly benefit the City. In addition to these two major players, nine corporate groups lobbied the City as well as the corporate owners of five malls including Yorkdale and Eaton Centre.
MPAC Board
One of the biggest challenges for the City of Toronto to properly implement the Commercial Parking Levy is: the City does not know exactly how many parking spots exist in Toronto beyond broad estimates. To help answer this question, the City turned to the Municipal Property Assessment Corporation (MPAC) to develop a preliminary inventory for surface parking in Toronto. MPAC is a provincial non-profit corporation funded by all municipalities in Ontario to assess properties and share those values with municipalities so they can determine property and education taxes. The recent staff report to the Executive Committee shares that MPAC is a critical partner on the implementation of the Commercial Parking Levy based on their “access to property assessment data, support for technology upgrades, and ability to develop and maintain audit, request for reconsideration, and appeal processes.”
However, MPAC has indicated that their commitment to partner on this work is subject to Board approval and potentially provincial government officials. The MPAC Board is made up of finance and real estate executives whose corporate interests are not aligned with the everyday transit user in the City of Toronto. As Social Planning Toronto’s Executive Director, Jin Huh, shared in a recent press release: “MPAC’s blocking of this tool is undemocratic and will harm the City of Toronto’s ability to fund a better city.”
Government Powers
One of the strongest benefits of the Commercial Parking Levy is that it is within the City of Toronto’s power to introduce. However, the ability to implement this tool is another story. Although the City of Toronto Act (COTA) gives Council the authority to introduce certain revenue tools without Provincial regulatory or policy changes, the powers under COTA do not ensure cooperation from the Province or provincial corporations, like MPAC, to implement the revenue tools. The problem is similar to the one faced by Inclusionary Zoning, a tool that would guarantee a percentage of affordable housing in private developments near major transit stations. The City adopted the policy in 2021, but it cannot implement the tool until the Ministry of Municipal Affairs and Housing approves the areas where the policy would apply. Without the Ministry’s approval, Inclusionary Zoning is stalled from being implemented despite the bylaw being passed.
These examples demonstrate that the provincial government can grant power to the City with one hand, yet will still pose barriers for the City to generate its own revenue. In order to grant the City of Toronto more autonomy and power to implement policies and revenue tools, the City is also considering a motion next week at the Executive Committee meeting to establish a Program Advisory Body on Municipal Autonomy and Effective Local Governance to work toward achieving local government authority over municipal affairs. This body would explore charter cities as a means to achieving this goal.
Where Do We Go From Here?
If Council wants to reduce the City’s reliance on property taxes to sustain the municipal budget, then the City must try harder to implement the commercial parking levy - with or without MPAC. Counting on an unelected provincial body to control whether Toronto can or cannot implement an available revenue tool should not be our only option. We need the City to direct staff to find a way to implement the Commercial Parking Levy.
Here are some ways that you can take action:
Tell the Executive Committee We Need the Commercial Parking Levy!
The Executive Committee is meeting on Tuesday, January 28, 2025 to discuss the future of the Commercial Parking Levy. You can register to depute (speak to the committee members) to tell them that Toronto needs a Commercial Parking Levy now and they should explore all options to implement it! If you can’t attend in person or virtually, you can also submit a written deputation. At this meeting, the Executive Committee will also be considering the Stormwater Charge and the Charter City proposal, which are other key issues you can discuss in your deputation!
In order to sign up, you can click the following link and either select ‘Request to Speak’ to speak to committee members, or ‘Submit Comments’ to send a letter
TTC Riders has also created a letter writing template so you can contact your Councillor and let them know you support the Commercial Parking Levy.
Watch our Panel with TEA and TTCriders
To help inform your deputation, we recommend watching our event on January 23, 2025 with TEA and TTCriders on the Commercial Parking Levy.
Here are the resources shared during the event:
TEA - Resources on the Commercial Parking Levy
- Slides - What is a Commerical Parking Levy
- Backgrounder - Why Toronto Urgently Needs a Commercial Parking Levy
- Slides - Key Messages for Deputations
TTCriders - Resources on the Commercial Parking Lot Levy
- Slides - What TTC Improvements could we get with $108 million?
- Template - Making a Deputation to City Councillors
- RSVP - Sign Up to Depute
If you would like to take action on the Stormwater Charge, you can also sign TEA’s letter to take action on flooding in our City.