Toronto budget heading for final approval still has $79 million hole in it

Thestar.com
March 5, 2019
Jennifer Pagliaro

Mayor John Tory’s inner circle has approved a property tax increase at the rate of inflation without addressing a multimillion-dollar budget hole, leaving mounting repair bills for the next decade and omitting some service improvements that were earlier promised to residents.

On Monday morning, the executive committee signed off on a budget for 2019 that Tory called “responsible” while he and his budget chief Councillor Gary Crawford accused some critics of this plan of spreading “propaganda.”

Budget chief Gary Grawford, along with the mayor, said people have been spreading "propadanda" about the city's spending plan. He wouldn't specify what he wase referring to.

The final debate and decision will take place at council Thursday.

If approved then, it would see residential property taxes increase by 2.55 per cent -- in line with inflation as Tory again promised during the 2018 election. A new report from city staff outlined that when accounting for an increase in the levy for the city-building fund -- approved under Tory’s administration last term in order to fund housing and transit projects -- and other adjustments, the total increase will be 3.58 per cent, which is above inflation.

That works out to $104 dollars more in property taxes paid this year for the average homeowner, staff reported.

Other changes in 2019, if the plan approved by executive gets a final nod at council, would see water rates increase by 3 per cent (or $27 per household) and garbage rates rise 2.2 per cent. There would also be increased costs this year for each of the garbage bin sizes. Combined, this would mean $80.81 more for households with large waste bins, $96.25 more for those will medium bins and $72.06 more for small bins.

TTC fares are set to increase by 10 cents.

At the same time, the executive committee did not deal with a remaining budget hole of $79 million and it is unclear if it will be filled by the end of day Thursday.

A total of $45 million has been requested from the federal government to cover the cost of sheltering refugees, but city manager Chris Murray confirmed Monday there has not yet been any commitments from Ottawa. Should that money not be forthcoming, Murray said staff would return with a plan that could involve raiding the city’s reserve funds.

In defence of that plan, the budget chief, Crawford, said “all budgets, whether they’re corporate or whether they’re budgets that you do at home are made on assumptions and predictions.”

Another $34 million is expected to be cut from the city’s budget, but staff have not specified where those cuts will be made or what will happen if they don’t meet those targets.

The current plan recommends that council would reduce the amount of money shifted from general operating revenues to the city’s capital budget, which pays for big projects and maintaining the city’s infrastructure, in order to offset operating budget shortfalls. The outlook over the next decade is a repairs backlog that will grow from about $6 billion in 2018 to $9.5 billion in 2028. There is currently more than $47 billion in unfunded capital projects, according to city staff reports.

Last week in an op-ed published in the Toronto Sun, budget chief Gary Crawford accused councillors of trying to add “last-minute spending.” But some of those failed motions requested funding for programs and strategies that council or bodies of council have previously approved but which are not properly funded in this budget.

For example, the library board has approved a comprehensive plan to increase library service across the city by adding hours to various branches. The first phase of that plan, meant to start this year, would cost $3.35 million.

The budget also leaves out programs for at-risk youth expected to be funded through a new anti-gun violence plan championed by Tory and council. However, that more than $50-million plan relied entirely on funding from the federal government, with most of it now unfunded.

Tory was asked Monday morning what he would say to residents who expected that when those plans were promised they would actually happen. The mayor said that this is the normal course.

“This is nothing new in that over the years there has developed a list of many things that council has approved and said we’re approving this in principle, we think it’s a good idea, but in every case, always, these things are subject to the budget,” he said.

In asking questions about the budget, Tory began one question about the TTC’s funding by stating: “This is contrary to the propaganda that’s out there . . .”

Then Crawford used the term when referring to critics.

“Everyone’s been hearing this rhetoric and the propaganda that’s been happening over the last couple of weeks,” Crawford said. “We are investing in the city but what we’re doing is being able to invest in our city but at the same time keeping taxes affordable for the residents of our city.”

Neither Crawford nor Tory’s office could specify what they were referring to when asked about the comments later.

Tory also criticized an unnamed councillor, who his office later confirmed was Councillor Gord Perks, saying he “endorsed the notion of taking property taxes up 20 per cent over the next few years” and that a “30 per cent increase wasn’t out of the realm of possibility in his mind.”

But Perks has never made those statements.

Asked on what basis he made those comments, Tory’s spokesperson Don Peat said he was basing his remarks off comments Perks made to the Star. Those comments, in response to a Ryerson study on Toronto’s relatively low property taxes, were that a 20 per cent hike would equal about $600 million in revenue but that it would be bad policy to hit people with an increase like that all at once. Perks has also noted Toronto taxes its residents 30 per cent lower than other GTA municipalities.

Councillor Mike Layton, who sits on the budget committee, said the current budget plan sets the city up to fail.

“What are we going to do 10 years from now when we don’t have the money to pay for our crumbling roads or our crumbling parks and recreation infrastructure or our crumbling buildings?” he asked. “Do you start putting money again aside and raising the revenues so you don’t end up at that crisis point or do you just kind of close your eyes and say, ‘well, you know, I don’t think we can afford it at this stage, this is what I ran on so I’m going to stay the course.”

That, he said, will leave the next generation holding the bill.