TCHC Archives - Womens Post

City council voted to approve a “low-tax budget”, as described by city manager Peter Wallace during his presentation on the floor. It wasn’t an easy decision, and councillors spent about 15 hours debating and arguing the minutia details of each motion presented.

At the end of the day, the budget was approved nearly as-is 27-16.

In total, Toronto homeowners can expect an increase of 2 per cent on their residential property taxes, equalling 3.29 per cent, or $90 on average per home. While some councillors tried to introduce motions to decrease or increase that number, most saw it as a compromise for homeowners.

City staff frustratingly had to explain to councillors how taxes worked and that “budgets aren’t just about numbers. They are about the reality of city services.” When councillors tried to argue for more reduction in the budget or for lower taxes, staff had to remind them that property taxes were still well below inflation, and that over the past 19 years, city council has approved a property tax at or below the rate of inflation 15 times.

“The budget is consistent with Council expense policy and service direction and remains neutral in terms of overall revenue burden as a share of the economy,” said City Manager Peter Wallace. “I encourage Council to continue to address the cost drivers for City services and agencies, and look at stable revenue options to strengthen our fiscal sustainability.”

The new budget includes some investment in Toronto Community Housing, Toronto Transit Commission, and overall capital projects. At the same time, many reductions had to be made in order to balance the budget, including dipping into reserve funds in order to accommodate an extra $2 million in street sweeping.

“Today, City Council approved a balanced, responsible budget that invests in the needs of the people who live and work in Toronto,” said Mayor Tory in a statement released around midnight. “This budget delivers significant new funding for transit, child care and housing. Through the City Building Fund, we will begin to make much-needed investments in transit expansion and major infrastructure repair.”

Critics of the 2017 budget have called it a band-aid solution. Without the introduction of new revenue tools, the city will be forced to continuously reduce services while increasing taxes. Wallace pointed out that without the options of tolls — an option the provincial government squashed last month — it will be very difficult to maintain the services within the city. Before next year’s budget, Wallace says Toronto will have to ask itself how it will replace the approximate $5 billion tolls could have brought in to fund capital projects.

The executive committee pushed forward the proposed 2017 $10.5 billion budget on Tuesday, and leaves many in Toronto divided on how satisfied they are with the results.

Here are the highlights:

The budget includes a two per cent increase in residential property taxes, will allocate $80 million more to TTC, and $37 million to Toronto Community Housing. The city will also be providing 200 more shelter beds this year and Mayor John Tory has thrown his support behind supporting more daycare subsidy spots — there are currently 18,000 children on the daycare subsidy waitlist— though provincial aid is needed to help foot the bill. Unfortunately, recreation fees will still be increasing.

Other revenue tools that have been approved include a hotel tax of four per cent (10 per cent for short-term rentals) that is expected to bring in an extra $5.5 million in revenue. There is also a plan to harmonize the Ontario Land Transfer Tax with the Municipal Land Transfer Tax, which is estimated to raise $77 million.

The city will have to use $87.8 million from reserves to make up the rest of the budget.

The property tax hike, hotel, and municipal land-transfer tax were met with criticism by many Toronto citizens because these revenue tools put even more pressure on locals to meet the budget needs of the city. Relying so heavily on the inflated housing market is also an unstable revenue measure because if the housing bubble pops, the municipal land transfer tax and property tax rates could financially destroy homeowners.

Instead of consistently relying on property owners to pay for Toronto’s services year after year, more creative revenue tools need to be adopted in future city budgets. Road tolls, recently shot down by Premier Kathleen Wynne and the Ontario Liberals, is a solution that would directly fund transit by charging not only the 905 commuters coming into the city for work every day, but all Torontonian downtown drivers a small fee. Using road tolls as a revenue tool would relieve pressure on property tax hikes and raise much needed funds for transit and community housing that desperately need to be built.

The budget fills gaps on some city services, but falls short of adequately shortening the affordable housing waitlist, not to mention many other items on the agenda that desperately need funding.

TCHC

Toronto city council approves budget in light of tolls

Toronto 2017 budget continues to rely heavily on property owners