Part IV — Who pays · Chapter 14

The Funding Menu

Working chapter of Why can’t Toronto move? — the report’s summary page uses only claims that passed our receipt check. Figures below marked ⚠️ are still in the re-verification queue, labelled honestly rather than hidden. How that works: check our work.

Toronto isn't short on ideas for how to pay for transit — it's short on the provincial permission to use most of them.

The TTC's own board has already done the homework here. In 2026 it commissioned a jurisdictional review of transit funding tools that catalogued roughly fifty mechanisms in use around the world, each with an estimated yield. That review is a useful reality check, because it turns "Toronto should just find new revenue" from a slogan into a specific, gradeable list — and grading it honestly means asking three questions of every tool: is it legal today, how much would it actually raise, and has anything like it survived contact with real politics elsewhere. Run the full menu through that filter and it sorts itself into two very different piles: a handful of tools Toronto could use tomorrow, each worth tens or low hundreds of millions a year — and a second group large enough to matter against a $37.3-billion capital gap and roughly $1.5 billion a year in operating subsidy, every one of which sits behind a door only the provincial legislature can open.

Start with what's already legal. Toronto has held the power to charge a commercial parking levy since 2006 and has simply never used it. City staff's most recent estimate puts the yield at $100–108 million a year, applied only to commercial-class off-street lots — modest against the gap, but real money that requires no one's permission but City Council's, and a rollout that keeps slipping for reasons that look administrative and political rather than legal. A dedicated vehicle registration fee is the second live option: Toronto had one, a flat $60 a year, from 2008 to 2011, raising roughly $48 million a year before Council voted 39–6 to kill it. Montreal's transit region shows the more durable version of the same idea — a registration surtax that has run since 2011, expanded regionally in 2024, and reached $150 a vehicle in 2025, surviving politically for over a decade specifically because, unlike Toronto's old tax, it was earmarked for transit from day one rather than folded into general revenue. Land value capture — leasing or selling the development rights the TTC already holds over station properties — is the third tool available without new legislation, but it is structurally episodic rather than an annual stream: Madrid's one-time €1.245-billion land sale is the honest comparison here, not Hong Kong's ongoing rail-plus-property model, which depends on a land-ownership position Toronto never had and cannot now recreate.

Two tools large enough to matter sit on the other side of the door. A municipal sales tax or a dedicated share of the HST is the biggest single number on the table — the City's own modelling puts a 1% municipal sales tax at upwards of $360 million a year citywide, and an older regional estimate put a GTHA-wide version above a billion — but it needs the Ontario Legislature to grant Toronto a taxing power no Ontario municipality has ever held, and no such willingness has surfaced. Congestion pricing is the other, and it gets its own chapter next, because the legal path is unusually specific: it isn't merely unauthorized, it is affirmatively banned by standing statute.

What does dedicated funding look like where it has actually worked? The clearest lesson from the international record is that scale requires either a payroll tax or a ballot-approved sales tax — nothing smaller reliably closes a gap Toronto's size. France's versement mobilité, a payroll levy on employers with more than a handful of staff, is the standout: it is close to 40% of the Paris region transit authority's financing base on its own — a single, legally protected stream nearly as large as the TTC's entire annual operating budget, dedicated to transit and immune to being redirected toward other City priorities in a tight budget year. No equivalent employer levy exists anywhere in Ontario, and nothing in current law permits one. In the United States, dedicated local sales taxes approved directly by voters do the same job at similar scale — Los Angeles County's Measure M raises an estimated $860 million a year, Seattle's Sound Transit ballot measure raised $27.7 billion toward a single expansion program — but that mechanism depends on a ballot-referendum instrument that doesn't exist in Ontario municipal law; new local taxes here require the Legislature's say-so, not a public vote. London layers several tools at once — the congestion charge, a business-rate supplement, a development levy, an emissions charge — each legally distinct and each dedicated to a specific purpose, which is arguably the most transferable lesson of all: no single tool needs to close the whole gap if several run in parallel. Closer to home, Vancouver's TransLink runs a diversified but still-strained mix of a dedicated fuel tax and a parking sales tax, with British Columbia now moving to legislate a genuinely permanent vehicle levy rather than continuing to renew temporary top-ups — a structural commitment Ontario has made no equivalent move toward for the TTC. And Montreal's transit authority, despite the registration surtax and provincial funding, still projects a $280-million cyclical deficit — proof that even a diversified, partly-dedicated funding base doesn't guarantee fiscal stability on its own.

The honest bottom line is unglamorous. Every tool Toronto can use today is real but modest — collectively, at full deployment, something in the range of $250–350 million a year, against a capital gap measured in the tens of billions and an operating subsidy draw approaching $1.5 billion annually. Every tool sized to actually move those numbers needs an act of political will Toronto does not control: a provincial legislature that has not signalled interest in a municipal sales tax, a federal government that already cut its flagship transit fund by 17% before its first full year, or a repeal of a toll ban the same provincial government just wrote into law. Toronto's problem was never a shortage of good options on paper. It is that nearly every option large enough to matter sits behind a door the City cannot open on its own.