Toronto budget balanced on hot housing market but omits programs for improved transit, poverty reduction
A preliminary budget launched by city staff on Thursday is “gambling” on the real estate market while forcing councillors to haggle over priority programs, council critics say.

Thestar.com
Jennifer Pagliaro
Nov. 30, 2017

Toronto city staff have presented, for the first time this term, a preliminary budget that is already balanced.

But that balancing act for 2018, council critics say, relies on a “risky” strategy of continuing to bank on a hot housing market while omitting $41.2 million worth of programs and services aimed at fighting climate change, tackling poverty and improving transit.

The nearly $11-billion operating budget is also balanced using a 2.1 per cent residential property tax increase, which is the rate of inflation. Mayor John Tory has insisted on property tax increases that do not exceed the rate of inflation since his election in 2014.

“This is a good news budget,” Tory’s budget chief Councillor Gary Crawford told reporters after the budget launch Thursday. “It invests in key areas while keeping spending low and keeping tax increases also low.”

Crawford said he and the mayor would back several items left on the chopping chop for council’s choosing.

Critics of Tory’s administration on council noted the largely flat-lined budget what increases spending by less than 1 per cent will provide fewer services in a growing city.

When staff began to prepare the budget they were faced with a $510 million gap, which was closed before the budget was presented at a committee meeting Thursday.

It relies on increased revenues from the Municipal Land Transfer Tax, which is largely tied to home sales $85 million more in 2018, following the trend in 2017.

“For the fourth consecutive year we’re gambling on the real estate market and the bet we make every year gets bigger and bigger,” said Councillor Gord Perks, who has been chiefly critical of Tory’s administration. “This budget is incredibly risky.”

If the market softens mid-year, Perks said, council would be forced to consider immediate cuts to service.

Staff have also included $49 million in “bridging strategies,” one-time solutions to balance the budget that City Manager Peter Wallace has warned against and once referred to as a way to “kick the can down the road.”

Those strategies include pulling $28 million out of reserve funds and not paying off $18 million in debt owed by Toronto Community Housing.

The budget does find money for cash-strapped Toronto Community Housing to make repairs.

Those funds are provided by the city for 2018 through the capital budget in the absence of funding from other governments, meaning no TCH units will close prematurely in 2018.

TCH is on track to close 600 units by the end of this year.

The budget as it exists now does not include several key promises from Tory and major policy decisions made in the last 11 months, including the 2018 initiatives under the poverty reduction strategy, including increased childcare spaces and a low-income transit pass.

It also does not include the time-based transfers on the TTC for Presto users just approved at the TTC board and supported by Tory.

Crawford noted the budget is a lengthy process, with final council approval given in February, and that he and the mayor specifically supported the following items currently left out of the budget:

Time-based TTC transfers for Presto users ($11.1 million)
All initiatives under the poverty reduction strategy ($10.9 million)
Congestion-fighting measures including: Traffic wardens, permanent funding for “quick clear” squads and smart traffic technology (At least $2 million)
All TransformTO climate change action plan initiatives for 2018 ($2 million)
When asked why an anti-Black racism action plan ($995,400) and funds to support a newly-approved Indigenous office ($519,700) were left out of the preliminary budget an omission that drew gasps from the public gallery at committee on Thursday Crawford said he and the mayor would also be supporting those two items.

There is about $9 million available to put towards those items, staff said, but anything else would require new revenues, cuts or pulling money out of reserve funds.

Several dozen residents organized by advocacy group Social Planning Toronto were in front of city hall Thursday morning with a renewed campaign about things they are still waiting for in this budget. Their signs said things like “reliable transit,” “dental care for seniors,” and “shelter.”

“We’re here to tell Mayor Tory and the rest of council that with this year’s budget they have an opportunity to really make a difference,” said Riley Peterson, budget lead of the Toronto Youth Cabinet. “We are very concerned about our futures in this city and how affordable and livable this city could be for us going forward and we’re tired of status quo budgets.”