City manager says Toronto homeowners could get ‘second tax bill’ due to Ford government cuts

Francine Kopun
May 14, 2019
Thestar.com

Toronto may find itself in the unprecedented position of mailing out a second set of tax notices if council has to raise taxes to deal with provincial funding cuts made by Doug Ford’s Progressive Conservative government, according to city staff.

Staff were at work sending out final property tax bills even as council debated what to do about the estimated $178 million in cuts.

The city passed its 2019 budget in early March and many of the provincial funding cuts announced in recent weeks, which will affect city programs and services, are retroactive to April 1.

Municipalities are required by law to balance their budgets and cannot spend more than they make in any given year.

“Options may well include opening up the approved Council budget of March,” said city spokesperson Brad Ross.

“As of today, staff are proceeding with the issuance of tax bills, giving residents notice for their July tax bill/instalment.

“Should the budget be re-opened and amended with impacts on property taxes, mailing an amended tax bill is one option that may be considered, but staff will look at, and assess, all available options.”

Ross added that Toronto hasn’t issued a second tax bill before.

Mayor John Tory, now in his second term, has long held property tax increases in line with inflation, despite critics who say the city needs to raise more money to service Toronto’s growing population, but the level of recent provincial funding cuts is unprecedented, council heard on Tuesday.

According to a report from city manager Chris Murray, the provincial cuts to funding add up to $177.65 million in 2019, including a $65 million shortfall for Toronto Public Health, $84.8 million for Children’s Services and $24 million from the cancellation of the planned provincial gas tax funding.

Provincial officials disputed the city’s math and repeatedly said it should be able to offset the reductions in funding by finding efficiencies in the system. Ford has vowed to get the province’s deficit under control.

Don Peat, the mayor’s spokesman declined to say whether the mayor would consider a tax increase in light of the cuts.

“The Mayor is committed to keeping life in Toronto affordable -- that's why he has kept property tax increases at the rate of inflation for the last five years,” Peat wrote Tuesday in response to questions from the Star.

“Right now, Mayor Tory is focused on opposing these retroactive cuts and urging the province, including the Toronto PC MPPs, to change course to avoid hurting families. That's why City Council voted 25-1 today to request the Province of Ontario to reverse the $177.65 million dollars in unilateral, retroactive cuts to the City of Toronto’s 2019 Budget.”

Murray has been asked to report back on the service cuts and tax changes that may be required to balance the 2019 operating budget. The report is to be presented as early as June, but a firm date has not been selected.

Murray said going back into the city budget in order to rebalance it to reflect the provincial funding cuts, is a “unique occurrence.”

He was backed up by deputy city manager Giuliana Carbone, who, when asked if she’d seen cuts of this magnitude made retroactively to a city budget, said: “Not in my recollection and I’ve been in government for 30 years.”

Murray told council it’s not possible to cut nearly $180 million from the city budget in 2019 without affecting services.

“It will not be achieved through efficiencies without scaling back services,” he said.

“You can’t rule out there being a second tax bill.”

Tory’s motion also asks the city manager to inform the public of the impact of the cuts by posting notices at the entrance of all city-owned publicly accessible buildings and by advertising in public spaces -- including bus shelters -- which the city can do at no cost, as part of an existing contract.

Tory held a news conference Tuesday morning before the council meeting began, saying that the provincial cuts were made without regard to the city budget process and risk stalling Toronto’s performance as the economic engine of Canada.

Since the Progressive Conservative government tabled its budget on April 11, news of funding cuts to provincial programs has trickled out in dribs and drabs, through various agencies.

Tory called it: “Torture by 1,000 cuts.”

Gord McEachern, deputy chief of paramedic services, told council that a new reduction in funding of $3.84 million to Toronto Paramedic Services will increase response times, from 11:45 minutes to 12:05 minutes. The response time is the time paramedic crews can achieve in 90 per cent of cases.

Councillors were generally critical of the funding cuts, including Councillor Stephen Holyday (Ward 2 Etobicoke Centre), one of the more conservative members of council.

“I have a problem changing it mid-year,” he said of the retroactive cuts.

In council, Tory pointed out that when the province cut $150 million from the city’s budget in 2013, the vice-chair of the budget committee was councillor Doug Ford, who is now premier of the province and leader of the Progressive Conservative government imposing the reduction in funding on the city.

“We’ve been prudent managers of the taxpayers’ money, but these folks, the province, wants to come back and put the burden on the back of the hard-working people of Toronto, the residents of Toronto. It’s not fair,” Ford said in 2013.