City council voted to approve a “low-tax budget”, as described by city manager Peter Wallace during his presentation on the floor. It wasn’t an easy decision, and councillors spent about 15 hours debating and arguing the minutia details of each motion presented.
At the end of the day, the budget was approved nearly as-is 27-16.
In total, Toronto homeowners can expect an increase of 2 per cent on their residential property taxes, equalling 3.29 per cent, or $90 on average per home. While some councillors tried to introduce motions to decrease or increase that number, most saw it as a compromise for homeowners.
City staff frustratingly had to explain to councillors how taxes worked and that “budgets aren’t just about numbers. They are about the reality of city services.” When councillors tried to argue for more reduction in the budget or for lower taxes, staff had to remind them that property taxes were still well below inflation, and that over the past 19 years, city council has approved a property tax at or below the rate of inflation 15 times.
“The budget is consistent with Council expense policy and service direction and remains neutral in terms of overall revenue burden as a share of the economy,” said City Manager Peter Wallace. “I encourage Council to continue to address the cost drivers for City services and agencies, and look at stable revenue options to strengthen our fiscal sustainability.”
The new budget includes some investment in Toronto Community Housing, Toronto Transit Commission, and overall capital projects. At the same time, many reductions had to be made in order to balance the budget, including dipping into reserve funds in order to accommodate an extra $2 million in street sweeping.
“Today, City Council approved a balanced, responsible budget that invests in the needs of the people who live and work in Toronto,” said Mayor Tory in a statement released around midnight. “This budget delivers significant new funding for transit, child care and housing. Through the City Building Fund, we will begin to make much-needed investments in transit expansion and major infrastructure repair.”
Critics of the 2017 budget have called it a band-aid solution. Without the introduction of new revenue tools, the city will be forced to continuously reduce services while increasing taxes. Wallace pointed out that without the options of tolls — an option the provincial government squashed last month — it will be very difficult to maintain the services within the city. Before next year’s budget, Wallace says Toronto will have to ask itself how it will replace the approximate $5 billion tolls could have brought in to fund capital projects.