There's no such thing as 'free' parking
"There is no such thing as free parking — even if you work at a parking lot." This Star headline, was prompted by a judgment made recently by the Honourable Justice T.E. Margeson where the appellant was the Toronto Parking Authority (TPA) and the respondent the Minister of National Revenue.
Essentially the ruling states that a parking space provided to an employee by their employer should be considered a taxable benefit that would attract Canada Pension Plan contributions.
If the judgment were applied further afield there could be tax implications for anyone who drives to work and parks their car in a space provided by their employer. Considering that an estimated 70 per cent of Canadians drive and park their cars free of charge on their employers’ property the financial ramifications for workers and their employers could be profound.
The challenge, of course, is that if an employer decided to purchase a transit pass for their employee instead of giving them a free parking space to use each day, their investment in transit would be considered a taxable benefit.
If you consider this point in the context of the current transit dialogue that’s gripped the city it seems that at the very least our tax laws should be aligned with our community goals. If we want more people to use transit and use their autos less, then commuters deserve a choice and we could start by acknowledging that parking is not free, it’s a benefit and we should have to pay for the luxury.
Determining the economic value of a parking space at a TPA lot or garage is easy; they have a big sign out front with the prices listed. On this point the parking authority argued that it does not lose money because the lots aren’t full, and that no one is guaranteed a space. Unfortunately for the TPA and its employees their arguments concerning the value of the benefit didn’t sway the court and if they park without paying, it’s a taxable benefit.
At a suburban office park the value of an "employee parking" space is more difficult to assess, but it can be done. Land values in most of the GTA have approached the $1 million an acre mark, and the cost of building and maintaining a parking lot can range between $20 and $50 a month per parking space.
So the parking space that millions of Canadians use each day does have a value and given surface parking lots are one of the more dominate land forms in our cities it might be useful if we take a closer look at how much all this free parking is actually costing us.