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Proposed budget would see property tax increase of 2.75 per cent

The first budget of Mayor John Tory’s administration promises to keep people moving while keeping taxes low.
Jan. 20, 2015
By Jennifer Pagliaro

Mayor John Tory wants to significantly hike Toronto’s spending on transit and transportation while raising residential property taxes by 2.25 per cent.

In his debut budget unveiled Tuesday, Tory proposed new investments totalling $170 million but his balancing act hinges on $86 million in provincial funding that is not yet promised.

Though more detailed numbers are yet to be debated, councillors largely praised the new mayor, calling the budget both responsible and generous in spending for service improvements.

The 2.25 per cent residential hike would add $58.66 to the $2,596 bill for the average Toronto home worth $524,833.

When the city factors in the previously approved .5 per cent hike specifically for Scarborough subway construction, the hike is $71.70. Another $11.49 will be added by provincial assessment changes, bringing the total bill increase in the budget as proposed to $83.19 on that average home.

Riffing off his earlier announcement of $95 million for TTC improvements on Monday, Tory continued on his message of change when it comes to getting around the city.

“That is what this entire budget is focused on - focused on getting Toronto moving, putting people first and keeping taxes low,” Tory said. “The budget will continue to maintain the city’s fiscal health.”

The city’s most vulnerable residents will see a less than 1 per cent tax increase, according to city manager Joe Pennachetti.

Business owners will see a property tax increase below that of homeowners, at 0.75 per cent - up from a 0.67 per cent increase in 2014.

Staff and council were faced with a balancing act between $454 million in opening budget pressures and $75 million in proposed new spending from tax dollars for service improvements - what Tory called the largest investment in recent history.

Those pressures, earlier estimated by staff, already anticipated a 10 cent TTC fare increase - the same Tory announced yesterday for all non-cash fares.

The current draft budget also anticipates $86 million in assistance from the province to plug a gap left from the unexpected annual loss of $43 million in housing and social services funding for last year and 2015.

But it’s unclear if the province is committed to providing that much-needed funding.

“We’re making real progress and we’re hoping we’ll have something to announce maybe as early as next week,” the city’s chief financial officer, Rob Rossini, said of talks with the province.

The newly proposed investments, as well as new money allocated in the 10-year capital plan, will largely focus on transit and transportation infrastructure.

That includes adding 60 new subway cars and 810 buses at a total cost of $762 million as part of the capital plan. It also includes $433 million for repairing the Gardiner Expressway, funded through debt.

Most of that new investment from taxes in the current budget would go to the TTC - totaling $41 million. Additional TTC improvements in the current budget will come from an anticipated $43 million in fare increases.

The new investments also allow Tory to keep some of his campaign promises to reduce poverty, with $21 million set out in the operating budget, and to increase the city’s tree canopy after the December 2013 ice storm, with $500,000 set aside.

It is proposed that the city could add 181 new shelter beds, after council spent weeks fretting over extreme cold weather alerts and concerns over recent deaths of homeless persons. A total of $7.9 million is proposed for shelter, support and housing administration.

Investment in Emergency Medical Services would see 58 new positions added, including 56 paramedics, to respond to an increase in calls. There is $3.7 million in tax funding allocated for EMS in the current budget.

During the early briefing, some councillors criticized some aspects of the overview, including little slated investment in child care. Part of a $12 million total investment in new facilities would go towards one new child care centre in the proposed budget.

Councillors praised Tory on Tuesday, calling the budget a needed change in direction from the days under former mayor Rob Ford’s administration, which saw controversial cutting to spending on city programs and services.

Councillor Glenn de Baeremaeker, one of the city’s four deputy mayors, said this is the best budget he has seen in 11 years.

“It’s just a complete change to what we saw in the last four years. It’s like the dark clouds have parted and the sun is shining in on the City of Toronto,” De Baeremaeker said, adding the days of “hissy fits” under the Ford administration are over. “I think it tries to please everybody to the greatest extent possible.”

Left-wing, downtown Councillor Paula Fletcher agreed the budget is “pretty good news.”

“We’ve moved from a mayor who simply said we have a spending problem, not a revenue problem - and had set out to cut everything including the kitchen sink - to a mayor who’s saying I want to find a way to expand services for the City of Toronto and look at revenues over the long term and have the city have fiscal stability,” Fletcher said.

Some councillors still worried about a portion of the budget hinging on provincial dollars.

Councillor Mary Fragedakis, who is representing Toronto-Danforth for her second term, said she’s never seen council balance a budget with the expectation of provincial funds.

“It would be significant to try to plug that hole if that money was not to come through,” Fragedakis said, adding it is encouraging those answers should come before council debates the final budget in March.

Though it represents a small percentage of the total budget, De Baeremaeker agreed not securing those funds would put the city in “crisis mode.”

“I think the budget chief, our staff, the mayor are not irresponsible,” he said. “So I don’t think they’d be putting that in the budget unless they had some confidence the province will do the right thing.”