G&M - Toronto is in danger of becoming "a bedroom community for the 905 region

[Mr Man]

Ignore the alarmist title. But the article does bring up some interesting points.

http://www.theglobeandmail.com/servl...tory/National/

Toronto is in danger of becoming "a bedroom community for the 905 region
By JEFF GRAY

Wednesday, June 15, 2005 Updated at 4:41 AM EDT

From Wednesday's Globe and Mail

Toronto is in danger of becoming "a bedroom community for the 905 region," as higher taxes and growing traffic congestion drive businesses out of the downtown core, a new report warns.

The report, scheduled to be released today by the Canadian Urban Institute, a Toronto-based think tank, says that between 1998 and 2005 just seven new "Class A" top-of-the-line office buildings were built in downtown Toronto, even as condominium construction boomed. Meanwhile, 102 new Class A buildings went up in the suburban 905 belt.

"Is Toronto's destiny to become a bedroom community for the 905 region?" the report's asks. "This is surely not the intention of any level of government, although it may be the unintended consequence of years of neglect."

Largely to blame for the imbalance, says the CUI's Glenn Miller, are property-tax bills for downtown businesses that are much higher than the rates paid elsewhere.

For instance, commercial property taxes on top-of-the-line Class A office space in west Toronto averages $6.61 a square foot, compared to just $4.62 across the border in Mississauga's airport corporate centre area.

The tax difference, passed on to tenant businesses by landlords, has a large impact on a building with hundreds of thousands of square feet in office space.

The higher tax burden also means Toronto landlords feel the squeeze, as they are forced to charge lower rents in order to keep their tenants from fleeing, Mr. Miller said.

Factor in rent and other added costs and some downtown offices cost more than $40 a square foot -- approaching twice the going rate in the suburbs, he said.

A large chunk of the higher tax bill is due to the province's education tax, which is set at a higher rate for businesses in Toronto than it is for those elsewhere. The report calls on the province to level the playing field across the GTA.

But the study, which was funded by the Toronto Office Coalition, an association of owners and tenants in high-end offices in the city, also cites other factors. It says traffic congestion, and the lengthy process required to get a new building approved, are also driving away new development in Toronto.

"That combination of things drives people to say, 'These are our corporate needs -- maybe we should locate out by the airport'," Mr. Miller said yesterday.

Some businesses, such as several major banks, maintain downtown office space but have moved call centres or other functions outside the city in recent years. And grocery giant Loblaw Cos. Ltd. recently moved its headquarters from midtown Toronto to Mississauga.

Despite the worrying signs, Toronto still has the largest concentration of office space in Canada, generating $500-million in taxes for city hall and employing more than 500,000 people, says the report, which surveyed 30 major GTA businesses.

Toronto Mayor David Miller says he is happy to see the report highlight the need for the province to even out the disproportionate amount of education tax that Toronto businesses pay. But he said businesses cannot expect a tax cut from city hall any time soon, since the city is stuck with a $1.1-billion budget shortfall.

"Toronto is Canada's pre-eminent business address," the mayor said. "By North American standards, our costs are low, including taxes."

He pledged to take the report into consideration as the city comes up with a new strategy to attract businesses. He said the disproportionate property tax burden shouldered by business evolved over 60 years, and said the city will try to even it out -- but not with tax cuts.

Toronto, under his leadership, is investing in public transit, arts and culture and cleaning up the city's streets and parks -- all of which attract businesses, too, he said.

[KGB]

Toronto also commands a huge share of the GTA's industrial space...about half of it. Companies are begining to stop focussing on just land costs, taxes, etc, and seeing the benifits of being where a large quantity of workers are located on good transit.






KGB

[Mr Man]

Originally Posted by KGB

Toronto also commands a huge share of the GTA's industrial space...about half of it. Companies are begining to stop focussing on just land costs, taxes, etc, and seeing the benifits of being where a large quantity of workers are located on good transit.






KGB

Interesting point. Industrial space is rarely mentioned in these types of articles.

[rapideye95]

that's true when u think of it all the industires are wildly spread out

[rt_0891]

The 905's tax bill is going to go up soon. No way can they substain themselves with current taxation levels.

[Mr Man]

Originally Posted by rt_0891

The 905's tax bill is going to go up soon. No way can they substain themselves with current taxation levels.

err. Don't you mean the 416 tax bill with its annual $1.1 billion gap between expenses and revenues? At some point debt financing and asset sales become counterproductive. The 905 is actually rasing there tax rates to cover expenses. Toronto on the other hand raises it approximatly 3%. An amount which covers the interest payment for the new debt borrowed for that year and not much else.

[rt_0891]

Originally Posted by Mr Man

err. Don't you mean the 416 tax bill with its annual $1.1 billion gap between expenses and revenues? At some point debt financing and asset sales become counterproductive. The 905 is actually rasing there tax rates to cover expenses. Toronto on the other hand raises it approximatly 3%. An amount which covers the interest payment for the new debt borrowed for that year and not much else.

Yes, that's true too. I guess this is what happens when Toronto has to pay for a dissproportinate amount of the GTA's services. e.g. welfare and social housing.

[Mr Man]

Originally Posted by rt_0891

Yes, that's true too. I guess this is what happens when Toronto has to pay for a dissproportinate amount of the GTA's services. e.g. welfare and social housing.

This is true. It's also the reason why Toronto must demand that the province and federal government pay its fair share for the costs downloaded and services its forced to provide.


It's hilarious that the federal government can drain billions out of Toronto and Ontario while Ontarioians seem content at the excuse that Toronto is a provincial responsibility. The federal government might as well enact a special GST and income tax rate of 70% over the City of Toronto to expediate the process of sucking the city dry. Torontonians would not care anyway. (That's what the Harris government did with education property taxes on business - setting it higher in Toronto than anywhere else in the province. Even though Harris is gone, that policy is still in place. No one seems to care.)

I'm telling ya that Toronto is its own worse enemy at times.

[Mr Man]

I may be quiet these days, but I still read all the city staff reports. It's very interesting how few of them make it to the media given that they're always looking for something alarmist to publish.

http://www.toronto.ca/legdocs/2005/a...0502/it008.pdf

[rt_0891]

^lol. You're in Florida right, and you seem to be more informed than us TOers at home.

Yes, I agree, it's time to slap some sense back into those slimey politicans and make them realize Toronto's plight.

[Mr Man]

I'm currently in the armpit of Florida. Not much to do but study and read planning reports .

[KGB]

Well, we have to be more acurate, and say the gap between what we'd "like" to spend, and what we "have" to spend. At the end of the day, there is no actual gap, as balanced budgets are forced by law. The only time the city actually borrows money, is when capital projects require it, and it's never that much.

Peoplewill just have to live with the fact that to increase spending, requires increasing the taxes the revenue is based on....that is, until other levels of governments decide to share some it's revenues with the municipality (which is starting to trickle in).





KGB

[Mr Man]

Originally Posted by KGB

Well, we have to be more acurate, and say the gap between what we'd "like" to spend, and what we "have" to spend. At the end of the day, there is no actual gap, as balanced budgets are forced by law. The only time the city actually borrows money, is when capital projects require it, and it's never that much.

KGB, I agree that the city does not have much more programs to cut. But they use some pretty interesting accounting. Money that is earmarked for infastructure repair and maintinance is diverted to the operating budget. Then the city will borrow for the capital budget to replace the funds they diverted to the operating budget. In essence, Toronto is borrowing to fund its annual operating budget which is a very bad thing. More info can be found in the link I posted above. It speaks of borrowing close to $1 billion in 2006 and the breakdown of how it will be spent. It's a very interesting read.

[ssiguy2]

Ontario and Toronto have to stop playing Mr.Conciliatory and play hard ball. If that means pulling down some flags{although I personally found it discusting} then so be it. It is the only way the feds will notice is if they are embarrassed.
I've said it before and I say it again..........instead of bitching about Quebec, learn from it, blackmail works.

[doady]

This article is BS. New businesses are located in the 905 but that doesn't mean businesses in Toronto are relocating there.

[KGB]

"But they use some pretty interesting accounting. Money that is earmarked for infastructure repair and maintinance is diverted to the operating budget."


Well, there's nothing wrong with municipal "borrowing" at all. In fact borrowing is a prudent thing to do, given it's done properly...ie against future revenues or increased assets. It's not like we want to end up like Berlin or NYC, where they are just pushing the problem on future taxpayers and politicians in a completely unsustainable and irresponsible way, hoping they will get bailed out somewhere along the line. In fact, I don't agree with a total provincial ban on municipal operational borrowing at all...it's quite stupid.

And I think they should get more "creative" with their accounting.






KGB

[Roch5220]

Originally Posted by doady

This article is BS. New businesses are located in the 905 but that doesn't mean businesses in Toronto are relocating there.

No, they are, even head offices. A bout a year a go, an analysis was issued in a newspaper identify where Canada's top 200 or so corps had their head office. Toronto had significantly decreased from a couple of decades ago, as did most cities, except Calgary which had increased by 1. Torontos decrease was 905's gain.

[JARdan]

Nevermind... lol.

[rapideye95]

it's true companies like Vonage made Canada's head office in Mississauga. Kellogg Canada has also moved their head office to mississauga...Here is all of the Information...Their is also some demographic information which is also very important...check this out

http://www.mississauga.ca/ecity/down...ype&id=3400029

[valantino]

"Toronto is in danger of becoming "a bedroom community for the 905 region "

Hope so as I'd love to live on the top floor of scotia plaza