So far, 2025 is shaping up to be a year where significant progress is being made on the legislative front. A big one—nearly 20 years in the making—has been an amendment via  the Ontario budget that removes the ability for the City of Toronto set its own personal vehicle tax. 

In May, the Ontario Government announced its budget for the year, which included an amendment to the City of Toronto Act (removing the city’s powers to charge that personal vehicle tax). The budget was subsequently passed in the Ontario legislature at Queens Park on June 3, with 70 MPPs voting in favour and 42 voting against. Bill 24 officially became law on June 5, 2025, when it received Royal Assent— the final step required to bring this legislation into force.

Welcome news

This was welcome news for the MVRO and car dealers across the province as well as businesses and consumers.  

Back in 2006, then Toronto Mayor David Miller lobbied the province to give the city the ability to charge a personal vehicle tax, and from 2008-2011, when the tax was in effect at $60 per vehicle, it generated $48 million on an annual basis. It was one of the most hated taxes ever introduced and was scrapped when Rob Ford was elected Mayor of Toronto in 2010. Yet while the tax was gone, it still had the ability to resurface since the City’s taxing powers were still on the books. In fact, since 2015, several City Councillors in Toronto have brought forward at least eight separate motions to reinstate a personal vehicle tax and in 2018, things went a step further when another municipality, York Region also sought similar taxation powers. 

MVRO fought to defeat York Region’s efforts and since 2006, has prioritized in working with the province to recommend that the City of Toronto should no longer have the ability to set its own personal vehicle tax.

Certainty and protection

On page 108 of the 2025 provincial budget, it states that: “Amendments would also remove the City of Toronto’s authority to implement a personal vehicle tax, bringing it in line with other municipalities. This will provide certainty to drivers that they will be protected from new charges for using their vehicles and accessing roads.”

“With the budget now passed, it marks a significant victory by permanently prohibiting all 444 municipalities in Ontario, including Toronto, from imposing their own personal vehicle taxes.”

Brent Ravelle, President of MVRO, said that the association owes Ontario Premier Doug Ford, Finance Minister Peter Bethlenfalvy and the province a heartfelt thank you for removing the City of Toronto’s personal vehicle taxing powers. And, after 19 years it’s good to see this tax finally run out of gas for good. 

Needless tax

With the enactment of this budget provision, new car retailers and Toronto drivers are no longer threatened by a needless tax that unfairly penalized people for simply owning a vehicle to run their household, one that could have costed them $100 per vehicle, representing a total of $94 million per year. 

Further illustrating the irrelevance of such a vehicle tax, the province’s recent decision to assume responsibility for the Gardiner Expressway and Don Valley Parkway has freed up $7 billion in ongoing capital costs for the City of Toronto. That’s almost 150 times greater than the $48 million per year the Toronto vehicle tax ever generated when it was in effect.