Toronto Mulling ‘Rain Tax’ for Commercial Sector as Part of Flood Response

Cars are partially submerged in flood waters in the Don Valley following heavy rain in Toronto, on July 16 2024. (The Canadian Press/Arlyn McAdorey)

Toronto city council has unanimously voted to review a variety of new flood prevention measures, which could include the introduction of a controversial “rain tax” for commercial property owners.

City staff was authorized by council July 25 to explore stormwater mitigation measures in response to the growing number of severe weather occurrences in Toronto. A report is due by year’s end.

Staff will also look into potentially implementing a stormwater fee for businesses that have large non-porous parking lots—a contributing factor to flooding, according to Toronto Mayor Olivia Chow.

Critics, including Spadina-Fort York MP Kevin Vuong, have described the possible flood mitigation charges as a “rain tax.’’

The move to explore potential storm water charges comes just over a week after a major summer storm caused flash flooding and property damage in Toronto. More than 100 millimetres of rain fell in the city July 16, flooding Union Station, the Don Valley Parkway, and the Gardiner Expressway as well as homes and businesses.

The storm left 167,000 Toronto Hydro customers without power and the city received more 3,000 calls about flooding.

Ms. Chow, who put forward the motion to explore storm water fees, said the city should assess flood mitigation strategies for homeowners and businesses swiftly.

“It rains a lot and, when it rains, the rain has to have somewhere to go,” Ms. Chow said. “We know there will be more storms. We know we need to deal with this.”

Commercial properties and parking lots contribute a minimum of 40 percent of the city’s stormwater runoff, the mayor said. While traditional pavement allows runoff into city sewage systems, a porous surface enables rain to seep into the ground.

That’s where the potential stormwater fee comes in. Ms. Chow said her motion asks city staff to look at the implementation of a stormwater charge on commercial properties and come up with incentives to encourage owners to put in porous parking lots.

Businesses that permit their parking lots to become “stormwater lakes” should be held accountable, Ms. Chow said.

“If they are a good corporate citizen, they will do the conversion,” she added, referring to the installation of porous pavement.

City staff have also been tasked with creating incentives to convince homeowners to implement flood prevention strategies on their properties. Homeowners will not be subject to the so-called rain tax.