A 37 per cent hike for mayor’s office, interest rate pain, $2 billion for Gardiner repairs: Eight Toronto budget take-aways

Demand for shelter beds is rising, along with the city’s borrowing costs and spending to keep the Gardiner Expressway in good repair.

Thestar.com
Jan. 11, 2023
David Rider

Breaking down the city's $16.16-billion tax and rate-supported operating budget.

Mayor John Tory’s proposed 2023 spending plan totals a whopping $65.4 billion for city of Toronto services and capital projects. Among expected details revealed Tuesday -- for example, police and TTC remain the biggest operating costs -- are others that stand out. Here are eight budget take-aways:

Even if all of Toronto’s dreams are answered, and the provincial and federal governments shower the city with every dollar it seeks, we’ll start 2024 in another deep budget hole. Ongoing pandemic impacts and other costs, city staff say, will see Toronto start next year with a gap of between $1.5 billion and $1.7 billion.

While some city departments can expect below-inflation funding increases, or even decreases, gross budget for Tory’s office is set to rise 37.5 per cent -- from $2.14 million to $2.94 million. His staff, who call the boost “the first real change to the budget of his office in eight years,” say it likely won’t rise again this term and argue that, adjusted for inflation, it’s lower than in 2009.
The city has a reserve fund earmarked to cover the budget gap if no provincial or federal bailouts come this year But if the city faces a similar shortfall next year and that reserve is gone? One option would be covering the gap with property taxes that would rise a whopping 24 per cent.

Among all the talk about how to fill Toronto’s massive budget shortfall, the mayor and city staff were noticeably quiet about looking at new taxes or levies to help fill that hole. The last major council debate over so-called revenue tools was a decade ago, when council voted down every proposal.

High interest rates aren’t just hurting people with mortgages. The city’s cost to borrow money to fund capital projects is forecast to skyrocket by $65 million this year. City staff blame a combination of interest rates not seen since the 1980s and a boost in building/rehabilitation projects that require financing.

A rise in demand for homeless shelter beds during the pandemic is not expected to end any time soon. City staff told budget committee members there were about 6,000 shelter beds pre-pandemic. That number rose to 8,500 last year and, amid the ongoing housing crisis, is expected to hit 9,000 this year including refugee claimants.

Tory has new veto powers over the city budget but is limited by his entanglements with telecom giant Rogers over what items he can deal with at city council. In a letter to the budget committee, the mayor promises to stay out of debate over spending on telephone, wireless and internet services, as well as improvements to BMO Field at Exhibition Place.

Spending to reduce the “state-of-good-repair” maintenance backlog for the Gardiner

Expressway is pegged at almost $2 billion over the next decade. Over the same period, the TTC’s state-of-good-repair backlog is set to grow by $6.3 billion.