Fast food tax breaks
City Hall Watcher #170: a look at who's getting a small biz tax break, plus your April Council recap
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I’ve got a new OPEN DATA CHALLENGE, looking at data on businesses that received a property tax cut thanks to City Hall’s new small business tax class. Many of them are independent businesses that surely struggled to make it through the pandemic. Others, though, appear to be Pizza Pizza franchises.
I’ve also got a recap of last week’s meeting of Council, with a look at votes on expropriation and bike lanes.
Plus more! Let’s get into it.
— Matt Elliott
@GraphicMatt / email@example.com / CityHallWatcher.com
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Open Data Challenge: listing the business addreses who got a property tax break
McDonald’s, Kentucky Fried Chicken and Pizza Hut.
Those are just a few of the businesses operating at addresses that appear to be eligible for a break on their property taxes under Toronto’s new small business property tax subclass. Specifically, seven McDonalds, four KFCs and four Pizza Huts. Also seemingly eligible are 23 Pizza Pizza locations, 29 Subway sandwich shops, 23 Tim Hortons franchises and four Shoppers Drug Marts.
And 24 Starbucks.
Let’s back up a sec.
Late in March, the City quietly released a list of commercial addresses eligible for their new small business tax subclass. The tax class, created by Toronto Council with a vote at their November meeting last year, gives a 15% reduction on the commercial rate to businesses that meet a list of criteria.
Generally, commercial properties are eligible if they have an assessed value of no more than $1 million. There’s a higher threshold for addresses located downtown or in the city’s growth centres. In these areas, businesses are eligible if the assessed value is less than $7 million, provided the lot size is no larger than 7,500 square feet.
When the item was debated at Council, there was concern that these criteria weren’t precise enough, and that the small business tax break would go to businesses that are decidedly not small.
Now that a list of eligible properties has been released, we can start to figure out if those concerns were valid.
The challenge: Generate a list of businesses with addresses set to receive a tax break under the City’s new Small Business Property Tax Subclass.
The dataset: Small Business Property Tax Subclass: Eligible Properties
The method: This was a tricky Open Data Challenge. The dataset released by the city includes just two columns: a tax assessment roll number and a street address. No business name or other information.
Assessment roll numbers could tell us a lot, but there’s no handy online tool to just look up assessment roll information. “The assessment rolls are on microfilm and hard copy. You will need to visit the Archives to see them,” says the City of Toronto Archives. To heck with that.
So to start analyzing this data, I matched up the addresses in this list with the addresses in another Open Data dataset: Municipal Licensing and Standards - Business Licences and Permits. This dataset uses basically the same address format, and provides an Operating Name for the businesses at that address.
The caveats: This analysis isn’t even close to comprehensive yet. The big caveat is that not all businesses require a City of Toronto business license. You need a license if you’re a restaurant or variety store. You don’t need a license if you’re, for example, a bank.
I managed to find business names for just 6,374 of the 29,020 addresses listed in the dataset. A drag. But it’s a start.
In addition, there are some addresses with multiple businesses on the premises. Street addresses are not consistent. I only used active and recent business license data to try to avoid situations where businesses that have closed are listed here, but the reality is that businesses close so frequently there is no doubt some of this information is already out of date.
The results: Here’s a look at the most common business names with properties that appear eligible to receive a property tax break. I removed duplicate addresses when making this list. I also took out ancillary business uses that exist on properties, like parking lot operators or clothing donation drop boxes.
Fast food and coffee dominate the list. Of particular concern for councillors, however, is that they appear to have given quite a nice tax break to payday loan businesses like Money Mart and Cash Money. Probably not their intent.
It’s important to remember the tax breaks going to these addresses won’t necessarily flow through to the businesses using the properties. Property tax is paid by the owner of the property, which is sometimes but not always the same as the business operating on the property. Whether landlords pass any of the savings on to their tenants is an open question.
This all speaks to just how hard it can be to design policy for stuff like this. It’s easy to say you’re going to give small business owners a tax break. It’s way harder to define “small business” and figure out a mechanism for identifying those small businesses. There are a lot of legitimately small and independent businesses that could stand to benefit from this policy. The question, I guess, is whether those benefits outweigh the icky feeling you get when you think about 24 Starbucks stores in Toronto getting a tax reduction.
Like I said above, this data is very incomplete and I would welcome some ideas on how to match more of these addresses with business names. I’ve published the data I used to Google Drive. Let me know what you can find.
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What Council did: decisions on the midtown Yonge Street bike lanes, Sherbourne expropriation, shelter hotels & more
Toronto Council met last week! It was a tight two-day affair. Agendas tend to shrink as elections approach.
It was also an emotional meeting. Kyiv’s Mayor Vitaliy Klitschko and Deputy Mayor Mykola Povoroznyk spoke virtually to Council for about an hour about the horrors of war facing their city. Mayor John Tory paid tribute to the hundreds of community ambassadors who helped drive Toronto’s vaccine program. Councillor Joe Cressy said goodbye, as he prepares to leave City Hall for a gig at George Brown College. There were more tears than we usually see in the Council Chamber.
It was also the first meeting held partially in person in a long time. My Star colleague Emma Teitel wrote about the weirdness of councillors who voted to axe the City’s mask bylaw opting to work from home.
In between the ceremonies and guest speakers, Council also got a few things done. Here are a few highlights.
IE28.7 - Council voted 22-4 to extend the ActiveTO pilot project that has put bike lanes on midtown Yonge Street between Bloor and Davisville on a “provisional” basis, with a report with additional data and recommendations due back no later than January 2023. This was a slightly watered-down version of the original staff recommendation, because of an amendedment by Mayor John Tory. Staff had recommended a full-year extension of the pilot to July 2023. This version only guarantees they’ll exist through January. Councillor Mike Layton, who preferred the original pilot extension plan, was one of the dissenters. Councillor Stephen Holyday, Councillor Michael Ford and Councillor Jaye Robinson also voted against, because they oppose the bike lanes.
EX31.4 - Councillor Kristyn Wong-Tam’s push to have the city move to expropriate some vacant land and a heritage building at 214 to 230 Sherbourne Street for use as affordable housing failed 5-20. The City had made an offer to acquire the property, but CreateTO CEO (and former John Tory staffer) Vic Gupta told councillors the City was outbid by an amount greater than ten million dollars. The mayor’s office worked to ensure this vote outcome. Only Cressy, Layton, Councillor Josh Matlow, Councillor Gord Perks and Wong-Tam supported it. (A similar motion from Wong-Tam, to look at acquiring the plaza next door to the property on Sherbourne for use as affordable housing, was also defeated, 10-15.
EX31.1 - The City’s new Reconciliation Action Plan was adopted 26-0. Elements of the plan will come up for review each year as part of the City’s budget process, so let’s keep close watch.
EX31.3 - Despite a pretty convincing Star column calling it a “sucker’s deal”, Council voted 21-1 to proceed with their bid to host up to five World Cup matches in 2026. The cost could total $290 million, with a third of that coming from City Hall. Councillor Gord Perks was the lone dissenter. A motion from Councillor Paul Ainslie asking for a report on ways to recoup the costs was withdrawn out of concern that it could weaken the City’s bidding position with World Cup organizers.
EC28.9 - Council voted 23-0 to adopt the staff plan to begin transitioning away from the shelter hotels set up during COVID. It’ll be a relatively slow process — most leases will be extended through next year. A motion from Councillor Kristyn Wong-Tam to look at ways to provide financial support for training laid-off hotel workers so they could work in the shelter hotels was defeated on a tie, 12-12. It can’t get any closer.
CC42.1 - An item requesting the provincial government amend the City of Toronto Act to allow cross-boundary transit service — so, for example, York buses could pick up passengers south of Steeles Avenue — got some pushback from Perks. Echoing some arguments laid out in a letter from the TTC union, Perks urged his colleagues to delay their approval of the item to allow for more analysis of allowing other transit operators to effectively compete for passengers with the TTC. Perks’ motion was defeated 5-13, with just Cressy, Layton, Wong-Tam, Perks and Councillor John Filion on board.
IE28.11 - The debate on the city’s January snowstorm was anything but chill. Staff had recommended coming back in January 2023 with recommendations for new service levels for dealing with extreme snowstorms. Councillor Josh Matlow wanted a quicker timeline, with a report back in July, arguing it’s very likely it’ll snow again in 2022. Councillor Jennifer McKelvie pushed back, arguing it wouldn’t be doable to have a report ready by July, and that dates between July and January aren’t workable because Council will be dealing with an election. McKelvie’s perspective won the day, with Matlow’s motion for a July report defeated 4-19, with only Filion, Robinson and Wong-Tam on his side.
For my full coverage of the meeting, you can read my collected Twitter thread. Council’s next meeting will start on May 11. I’ll be watching.
More from Matt: On the World Cup, and clearing the air before you leave
📰 For the Toronto Star last week, I wrote about the City’s starry-eyed and very expensive plans to host World Cup games in 2026. I called it a sucker’s deal. Council disagreed with me. Oh well.
🎧 I ended up talking about the piece on the radio with Kelly Cutrara on 640 Toronto. It was fun. You can listen here. (I also did a segment for Newstalk 1010 with Mark Towhey and Deb Hutton but I don’t think it’s online. Just imagine it was very good radio.)
🗞 For the Toronto Star this week, I’ve got a piece about airborne viruses and ventilation, and also about Councillor Joe Cressy’s final Council meeting. Look for it in your favourite newspaper.
In other news
Toronto Public Health has provided updated data on the deaths of people experiencing homelessness and it is all so very bleak. The number of homeless people dying on average each week has more than doubled over the last five years, with 4.2 people on average dying each week in 2021. Deaths from drug toxicity as a share of all deaths have increased from 32% in 2017 to 55% in 2021.
🌳🌳🌳 Tree journalism alert! The Star’s Jennifer Pagliaro gets to the root of the matter with an in-depth piece about one of Council’s singular tree debates.
The week at Toronto City Hall
MONDAY: 🩺 The Board of Health met this morning. They got a presentation on Toronto’s COVID progress and — hey, look at that — vaccines were tremendously effective at keeping people out of the hospital during the January omicron wave.
🎳 The Striking Committee also got together. They voted to put Councillor Ana Bailão and Councillor Cynthia Lai on the Federation of Canadian Municipalities Board of Directors. They were also supposed to appoint a councillor to the Toronto and Region Conservation Authority Board but, uh, no one was interested in the gig.
TUESDAY: 👉 The Civic Appointments Committee meets to recommend candidates for the TO Live Board.
🏗 The CreateTO Board meets to discuss plans for the redevelopment of the St. Lawrence Centre.
WEDNESDAY: 💸 The Budget Committee meets to consider a couple of minor adjustments to the capital budget.
💰The Debenture Committee meets to discuss issuing another $300 million worth of debt, most of which will go to the TTC. Of note is that the City is timing this debenture to get ahead of expected future interest rate hikes, which could significantly increase City Hall’s cost of borrowing. The City is paying an all-in interest rate of 3.37%, which is still historically low but up pretty sharply from the 2.958% the City got a year ago, and way up from the 1.7% it got in 2020. I wonder if the City will come to regret not taking more advantage of the low-interest rates when they were around.
🏆 Bid Award Panel contract award of the week: $1.4 million to fix a pedestrian bridge over Shoreham Drive.
THURSDAY: 🎭 The Board of Directors of TO Live meets to also contemplate the plans for the St. Lawrence Centre.
🙊 The Board of Management of the Toronto Zoo gets together. Bad news: the zoo needs some extra cash to complete their new outdoor orangutan exhibit.
🚇 The TTC Board meets. They’ll consider a report recommending the conversion of the SRT right-of-way to bus operation while transit riders wait around for the Scarborough Subway to open in 2030(ish). The Star’s Ben Spurr has more.
FRIDAY: It’s Good Friday and the Eve of Passover, so there will be no meetings.
NEXT WEEK: Monday’s a holiday. The rest of the week will see community council meetings for Etobicoke York, North York and Toronto & East York.
City Hall Watcher #170
Thanks for reading! I hope you enjoyed. If you’re not a subscriber, we’d love to have you. If you are a subscriber, I apologize for the various sales pitches strewn about this issue. Next week, we’ll be back to the very exclusive (and very cool) subscribers-only club. Because Monday is a holiday at City Hall, I’ll be publishing on Tuesday. See you then!
This is so cool!! Love the deep data dive. Question on cross-referencing street address and business names: what are your concerns on using google street address API to map out the business addresses? It would probably the first direction I look but I can see it can be inaccurate compared to the city's licensing and permits data 🤔