Toronto city council formally endorsed Wednesday an annual operating budget with property tax rises beyond the rate of inflation and increased costs for transit and garbage pickup.
The $13.53-billion budget is not actually balanced, as required by law, and assumes that the federal government will come through with $77-million in refugee settlement funding.
Officially, councillors voted to increase the property tax rate by 2 per cent in 2020. But it will actually rise by 4.24 per cent. The higher total is because of administrative adjustments that get made every year, and because of increases to a “city-building levy” on property taxes, dedicated to transit and affordable housing, championed by Mayor John Tory.
According to city staff, the property-tax bill for the average residential homeowner will increase by $128 in 2020, to $3,141.
“This is a good, responsible, realistic, forward-looking budget for a very fast-growing and very successful city,” Mr. Tory told reporters.
The mayor has run twice on a pledge not to increase taxes beyond the rate of inflation and broken the promise in each of his terms, by introducing special levies for transit and housing.
Some on the council’s left said that, while the city-building fund is a good start, more money will be needed to prepare for the city’s projected population increase.
“We don’t want to just be remembered as those status quo councillors,” Councillor Mike Layton said. “We don’t want to be known as those councillors that sat back and watched a homelessness crisis, a housing crisis, an environmental crisis go by.”
The budget approved Wednesday includes several new costs for residents.
The city will reduce rebates that had rewarded residents who produced less waste and used smaller garbage cans. Those with medium-sized bins will pay about $74 more this year and those with the smallest cans will pay about $81 more.
Toronto Transit Commission fares will also increase at the start of March. The cost will go up by 10 cents for most passengers, continuing a long-standing trend of TTC fares increasing faster than the rate of inflation.
Council approved a motion seeking a staff report into a commercial parking levy, but an attempt to get staff to study a vehicle registration tax was beaten back by the mayor and his allies.
Mr. Tory presented the budget as prudent and affordable for residents. He noted the increased property-tax levy he had successfully pushed for last year, arguing that people should not be asked to pay more than that. He called it “as much as people could justifiably be asked to pay," adding that the money would still be enough "to allow me to go to Ottawa and Queen’s Park and say, when it comes to the money that we need from you for transit and housing, our money’s on the table.”
However, even with the additional money, the state of good repair backlog – the amount of money needed to keep city assets in good shape – will continue to get worse over the next decade. Several councillors pointed out that the city has a $30-billion state of good repair and unfunded capital budget, only one-fifth of which can be paid for by the city-building fund.
“I think it’s time for us to face facts that we’re not going to be able to … deliver the quality of life that Torontonians want by crossing our fingers that other orders of government will increase their taxes and just send us money,” Councillor Gord Perks said.
“The conversation over the next several years in Toronto has to turn to what every long-term financial plan this council ever [received] said, which is the sales tax.”
Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.
Oliver Moore