Toronto Budget Chief Shelley Carroll announced a potential property tax increase of 10.5 percent as part of the first proposed budget of Mayor Olivia Chow’s tenure on Jan. 10.
That’s a nine percent hike combined with 1.5 percent toward the city building fund, for a 10.5 percent total.
The city says it may impose another 6 percent hike, a “federal impact levy,” if the federal government doesn’t provide Toronto with $250 million toward refugee housing. That would raise costs for homeowners a total 16.5 percent.
Ms. Carroll told reporters on Jan. 10 this ultimatum is the best way to get the federal funds. She said it’s not so much a “threat” as “an invitation to come to the table.”
Budget talks will conclude on Jan. 26, so the federal government must respond by then, Ms. Carroll said. Federal Finance Minister Chrystia Freeland said on Jan. 10 that the Liberal government is already supporting Toronto.
When asked about how the city justifies a large hike as Torontonians struggle through hard economic times, Ms. Carroll said a key message during pre-budget consultations with the public was that in hard times, the city needs to deliver the services. “This is when we need you most,” she said residents told her.
“We’ve done our best to find efficiencies,” she said. “There aren’t a lot of other efficiencies we can do without squarely hitting front-line services.”
For the average homeowner, she said the tax hike will work out to $30 per month, about $1 per day.
The city has an operating budget shortfall of about $1.8 billion. “I feel strongly that we cannot keep kicking that can down the road. We need to get our city back on track,” Ms. Carroll said.
CTF Ontario Director Jay Goldberg said the tax hike would create a financial burden for families already struggling with rising costs for necessities like groceries and home heating.
According to the CTF, this proposed increase would be the largest since Toronto’s amalgamation in 1998.
The New Deal agreement between Ontario and Toronto amounts to $1.2 billion in operating support from the province focusing on transit and shelter projects, and $7.6 billion in capital relief, including “uploading” the Gardiner Expressway and Don Valley Parkway highways to the province.
Chief Financial Officer and Treasurer Stephen Conforti said in a presentation to city council on Jan. 10 that the New Deal will help the city achieve “an enhanced level of financial sustainability by the end of 2026.”
