Mississauga businesses, developers, retailers and transport companies will face higher costs from proposed new taxes favoured by the Metrolinx transit agency.
Whether it’s a parking lot levy that affects Mississauga’s GE Canada, Microsoft and GlaxoSmithKline and Brampton’s Loblaws to regional hikes in the HST that could cut car sales, or new gas taxes and development charges, local businesses would be squeezed by the new transit charges.
“Our cities are very highly dependent on the use of the car,” said Sheldon Leiba, president of the Mississauga Board of Trade.
Many Mississauga companies have big parking lots that hold thousands of cars, especially large shopping malls as well as the big pharma companies along Mississauga Rd. and multinationals that populate the Airport Corporate Centre and the Meadowvale business park.
“The concern around the commercial parking levy was that it would disproportionately affect businesses in the 905,” Leiba said in an interview with YourMississaugaBiz.com.
“This is relative to those in downtown Toronto where they’ve got a pretty robust transit system and it’s a luxury to take your car.”
Stuart Wanlin, property manager for Bentall Kennedy Canada’s central and eastern Canadian properties, said the parking levy will have a “broad implication here from retail to industrial to office and it’s unclear in the document how exactly they plan to do this.”
“It sounds like a hidden realty tax. This hits businesses directly and we’re trying to promote business, not trying to make our jurisdictions more expensive.”
Wanlin said companies like Microsoft Canada, based in the Meadowvale business park in public transit-starved northwestern Mississauga, offer free parking to their employees and will be unfairly hit.
There’s “no viable public transportation option for them to reduce the parking spaces that Metrolinx thinks could be reduced,” he said.
The Retail Council of Canada also criticized the parking levy as “flawed” and said it would hurt retailers disproportionately.
Big malls like the Square One shopping centre in downtown Mississauga, Brampton’s Shoppers World or Bramalea City Centre — with huge parking lots for shoppers – could face increased costs and ultimately consumers would face higher prices in the stores.
“A tax on free parking spaces is just another form of property tax and would ultimately affect all consumers alike, whether they drive, take transit or walk to the store,” said David Wilkes, senior vice-president of the Retail Council of Canada.
“The Cadillac Fairviews and the Oxfords of the world are concerned as well about the number of spaces at Square One. How does that impact their tenants, because you can’t charge people to come to shop at your mall, they’ll go somewhere where they’re not charged. It becomes a cost to the businesses inside that mall.”
In its final report to the province, Metrolinx also proposes a 15 per cent hike in land development charges, which would raise about $100 million a year. Builders of offices, condos and factories would have to pay more. In Peel, new charges come on top of a 10 per cent hike last year that made projects more expensive to build.
“It’s never favourable when we have to incur additional costs on the background side,” said Joseph Alberga, director of sales and marketing at H&R Developments, a residential builder based on Skymark Ave in Mississauga.
“Whether it’s levy or an additional cost, it’s worn by the end user.”
Orlando Corp. president Phil King called development charges a broken model for government to raise money.
“You’re targeting only a certain sector for a transit system that should be open to everybody,” he said, adding it will make houses more expensive and make it tougher for the city to attract new businesses.
“We’re at a point now where the numbers are so large and we can’t afford to do that anymore,” he said, adding that he prefers raising income and sales taxes to pay for transit upgrades, including the $1.4 billion LRT planned for Hurontario St.
“They’re the only way that it should be done where everybody pays.”
On the HST, Metrolinx proposed to hike the HST in the Toronto area and Hamilton by one percentage point to 14 per cent to raise $1.3 billion a year.
This may seriously hurt the retail sector and create a form of provincial cross-border shopping. Some big ticket purchases like cars and trucks would likely shift outside Mississauga to parts of the province not affected by the HST hike. Local businesses would face higher costs of buying everything from computers and printers to raw materials and business services.
Meanwhile, a five cent a litre hike in gasoline and other fuel taxes would raise $330 million a year but would raise the cost of flying out of Pearson International Airport because of rising jet fuel costs.
Such a hike would also increase the cost of shipping goods from local manufacturers who use Highway 401, the QEW and other major roads to truck their products to market. That could squeeze the warehousing and distribution industry, a major employer in Mississauga and Brampton.
— With files from Jordan Maxwell and Jon Cook