Toronto preliminary budget calls for 2.17% property tax increase

Some city councillors are upset that many of the services Mayor John Tory promised Torontonians are not funded in the preliminary budget.

Toronto city manager Peter Wallace presented the preliminary 2016 operating and capital budgets at a meeting of council's budget committee on Tuesday, the start of the city's annual budget process.

Wallace called for a residential property tax increase of 2.17 per cent for the year, a figure that is larger than the inflationary hike of 1.3 per cent that Mayor John Tory has advocated for. 

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"Many of the promises the mayor has made around poverty reduction, improved affordable housing, some of the transit improvements... simply aren't funded here," he said. 

Counc. Shelley Carroll agreed, saying, "We've got a rough two months ahead of us, we've got to find a balance here and it's going to come down to what Torontonians need right now."

Carroll outlined some of those priorities in an interview.

"People died in the cold last year and we were promised that next year there would be warming centres funded and ready to go so that the day it's 25 below no one dies. They're now not in the budget," she said.

"Kids are getting shot right now and we were promised that next year there'd be $400,000 worth of youth lounges in our recreation centres so that kids are supervised and active indoors and not hanging around a shopping plaza getting shot. They're not in the budget," Carroll added.

The property tax increase, if accepted by council, is what's needed to cover an opening operating budget shortfall of $58 million. An "inflationary" residential property tax increase of 1.3 per cent would leave a shortfall of $23 million, an amount Wallace said is "quite small."

In a letter to budget chief Gary Crawford, Tory called for a property tax increase that's "in line with inflation."

The numbers presented by Wallace did not include about $67 million in so-called new and enhanced budget items. These are initiatives approved by council, and in some cases announced publicly by Tory, but not yet funded in the budget process.

These include:

• $19 million for TTC initiatives, including earlier Sunday service.
• $13 million for Toronto community housing.
• $6.7 million for a poverty reduction strategy.

Crawford said today's presentation show that council "has a lot of work to do," before the budget is approved.

In his presentation, Wallace said the city is becoming increasingly dependent on the Municipal Land Transfer Tax as a revenue source, which poured $520 million into city coffers.

But Coun. Joe Mihevc said the budget pressures are proof the city needs new revenue tools to "get the city we want.

"We need another revenue source," said Mihevc. "The elephant in the room today is, 'What is that revenue tool that's going to help us this year and next year?'" 

Wallace's presentation is the latest step in a lengthy budget process that will continue into the new year.

​You can read the full budget presentation here.