As part of Toronto's strategy to attract businesses and foster growth, the City has built an arsenal of incentives for companies building within its borders. These include a variety of tax credits, fee exemptions, and energy savings initiatives all designed to market the city as a competitive and appealing place to invest. 

Growing at an unprecedented rate, the City has heard complaints from businesses and developers about the lengthy and sometimes complicated development review process. To alleviate the concerns and to help guide businesses through this approval process, the Gold Star program was created. Eligible industrial, commercial office, and institutional projects are assigned an Economic Development Officer as part of the City Planning or Toronto Building case-managed team. Associated staff help guide these projects through the City’s development review process, from the initial application to final occupancy. 

In addition to the Gold Star program, one of the most significant incentives the City offers to businesses is the Imagination, Manufacturing, Innovation, Technology (IMIT) Incentive Program. For new developments in eligible industry sectors and locations, a 60% grant is applied to the increase in the property's municipal taxes attributable to development over 10 years. New projects and substantial renovations of existing buildings within Employment Areas designated under the Official Plan receive an additional 10% grant, totalling 70%. Eligible sectors include financial services, tourist attractions, manufacturing, creative industries, information and communication technology, and biomedical operations. The IMIT Incentive Program can also be used in conjunction with another incentive, Brownfield Remediation Tax Assistance (BRTA), to increase the grant further to 77%.  

Graph depicting the IMIT Incentive Program's TIEG grants (Tax Incremental Expansion Grant) over 10 years. Image courtesy of the City of Toronto.

The BRTA program encourages remediation of contaminated sites that are unsafe, unproductive, under-utilized, vacant or abandoned. To qualify, the property must be remediated and then developed for non-retail employment uses. As the property values of revitalized brownfield sites increase, the BRTA program allows the City to eliminate all or a portion of this tax increase up to 2 years or until eligible remediation costs have been covered under the program. If the eligible property is also receiving an IMIT incentive, participation in the BRTA program is extended to 3 years. 

Since 2008, a total of 23 IMIT applications have been approved, 8 of which included a brownfield remediation component. These developments represent $1.5 billion in new investment and over 20,000 jobs. The program to date has resulted in 8 million square feet of new and/or improved commercial and industrial space.  

These individual incentive programs are complemented by a series of property tax rebates. Vacant and partially vacant commercial buildings can receive a property tax rebate of 30% while vacant and partially vacant industrial buildings are eligible for a 35% rebate. To help with the costs of heritage preservation, owners of a designated and well-maintained heritage property with a Heritage Easement Agreement and no outstanding fees may apply for a property tax rebate of up to 40% on the property’s identified heritage attributes. Registered charities are also eligible for a property tax rebate of 40% on their commercial and industrial buildings. Overall property taxes for the multi-residential and business classes are expected to be reduced to 2.5 times the residential rate by 2020, with small business rates receiving the same reduction by 2015. 

Though the City of Toronto already has the lowest development charge rates across the Greater Toronto Area, further incentives have been created to encourage development. Currently, development charges are not applied to non-residential floor area located above and below the ground level. Full development charge exemptions may also be applied to industrial uses, college and university buildings, as well as buildings which receive a grant under the IMIT Incentive Program. Industrial developments are also exempt from conforming to the parkland dedication requirements under the Official Plan. To encourage sustainable development, buildings participating in the Toronto Green Standard receive a 20% development charge rebate. 

Development charge rates in the GTA. Image courtesy of Watson and Associations Economists Ltd.

In addition to the saveONenergy conservation programs being offered by the Ontario Power Authority, several energy savings initiatives are also being promoted by the City of Toronto:

  • Water Capacity Buy Back Program: Businesses which reduce their water use are eligible for a one-time cash rebate of up to 30 cents per litre of saved water per day. This allows the City to buy back unused water while promoting conservation and reducing business costs. 
  • Industrial Water Rate: Businesses consuming more than 6,000 cubic metres of water per year may benefit from a 30% reduction in the general water rate. In order to qualify, businesses need to fall within the industrial property tax class and submit a water conservation plan to the City. 
  • Sewer Surcharge Rebate Program: Industrial and commercial water customers qualify for a rebate based on the percentage of water not returned to the City’s sanitary sewer system. 
  • Eco-Roof Incentive Program: Eligible projects with green roofs can receive $75 for every square metre up to $100,000 and roofs that reflect the sun, thereby reducing heat buildup, receive between $2-5 per square metre up to $50,000. 

On a broader scale, the City’s Economic Development team provides industry support to key sectors by promoting business-friendly policies and assisting stakeholders with industry trends, issues and workforce training. The key sectors are:

These key sectors identified by the City have the potential for high growth and ultimately have a significant impact on the economy. Each key sector has a dedicated specialist with expertise in the industry that businesses can contact. 

Finally, a list of more than 60 sites including both vacant land and existing buildings available for sale and lease are profiled in the 2014 edition of The Signature Sites Collection. Businesses are also advised to consult the newsletter Toronto Business News to stay updated on the state of Toronto’s economy and recent industry issues. 

Contact information for Economic Development Officers across Toronto. Image courtesy of the City of Toronto.

Offering tax credits, grants and other incentives to businesses has been popular in the United States, especially since the 2008 recession. It is hoped the City can capitalize on these ideas while the initiatives that have been introduced continue to bring new opportunities and investment to Toronto. For more information about the various programs offered by the City, contact your area’s Economic Development Officer.