At a time when the City of Toronto is fishing around for loose change in the cushions to keep some programs going, it’s an unpleasant surprise to learn that it’s missing out on millions in tax revenue it should be collecting.
As city council was winding up debate on the city budget last week, new information emerged showing that the owner of a swanky Bloor Street shopping mall pays no property tax at all.
That’s because the owner of the land under The Colonnade – which includes high-end apartments as well as luxury shops like Prada, Chanel and Cartier in the heart of the so-called Mink Mile – is Victoria University, a college of the University of Toronto.
The 1951 Victoria University Act exempts all the college’s land from being taxed. City officials estimate the land under The Colonnade would have brought the city $12.2 million in property tax between 2009 and 2015 if a regular commercial operator owned it.
This is a great arrangement for Victoria University, but a lousy deal for city taxpayers. The U of T, it should be noted, has a similar arrangement with the province, but voluntarily makes payments in lieu of property tax for a few commercial properties it owns.
A city staff report quite rightly says the “financial unfairness” of the Victoria University arrangement is “stark.” If the college won’t cut a better deal with the city, the city will have no choice but to ask the province to amend the 1951 act and require the college to pay tax on its commercial operations.
Victoria University argues that any money it makes from The Colonnade goes to finance its academic mission. So if it has to pay property tax it will have to turn to the province for extra funding.
So it should. The college’s sweetheart deal on taxes amounts to subsidizing its operations at the expense of the city. The province should fund the college properly and let the city collect tax on a lucrative commercial operation.
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