Mayor David Miller says cutting services would be the worst course of action during this recession, but city of Toronto's proposed operating budget will drive up property taxes and some user fees.

"We are asking people ... who are employed to pay 25 cents per day to make sure we freeze TTC fares, that we build a great city and that we help the most vulnerable," he told a news conference on Tuesday.

Homeowners will be hit the hardest in Toronto's $8.7 billion operating budget for 2009. The plan calls for a four per cent property tax hike, among other fee increases.

The city expects to receive an extra $83 million from both residential and non-residential property taxes in 2009. Property taxes fund 39 per cent of the budget.

A four per cent property tax hike for homeowners means an additional $83 million being brought in, with residential taxpayers contributing $57 million businesses another $26 million. That translates into an annual increase of $89 for homes that are valued at $387,000.

Low-income seniors and people with disabilities are eligible to have their tax increases deferred or cancelled. Under the 2009 budget, the number of households eligible for the deferral will go up by 35 per cent.

The land transfer tax and vehicle transfer tax remain frozen, as do development charges. User fees will go up for some programs such as swimming.

However, the city will introduce new programs such as an idle-free campaign and tree-planting, which has some fiscally conservative critics seeing red instead of green.

"If he wasn't spending like a drunken sailor, then property taxes wouldn't have to increase at this rate," said Kevin Gaudet, federal director of the Canadian Taxpayers Federation.

"You can't go ahead and keep raising the expenditures and the costs on people here. Let's get real," said Coun. David Shiner, a former city budget chief.

Councillors opposed to the big-spending budget say the overall tax hike is closer to 10 per cent when one factors in the water rate hike. They say the city should be cutting its costs and imposing a hiring freeze.

"Since amalgamation, we've probably got 7,000 more people here than when we started," said Coun. Doug Holyday. "The budget that we started with was something like $5 billion; it's now close to $9 billion. When's the end in sight?"


"The continued reduction of business property taxes is part of (the city's) plan to enhance Toronto's business climate and is in addition to specific programs that the city has to support business," said a city-issued news release.

User fees - the cost of using services in Toronto -- will also see a 3.7 per cent increase.

The price of some programs, such as a 12-week adult aquatics program, will go up by $3.50, from $94.50 to $98.

User fees typically make up for 15 per cent of the city's total revenues. With the price increase, the city is expected to make $396.3 million from user fees, an extra $6.6 million than in 2008.

"The fiscal challenges faced by the City of Toronto can be described as difficult in good economic times," Miller said. "But in today's economy, the responsibility we face to protect services and leave no one behind creates a heavy burden."

$23.5M investment

The budget also highlights $23.5 million in investments the city is planning to make in areas of climate change, transit, public spaces and social services.

Along with government partners, Toronto is investing in:

  • transit services across the city
  • making the Streets to Homes program permanent
  • thirty-five new or enhanced programs for at-risk groups including seniors, youth, women and aboriginal youth in priority neighbourhoods
  • the city's new 311, 24-hour customer service contact centre
  • nursing shifts in hospital emergency rooms in an effort to reduce wait times
  • maintaining snow clearing and removal service
  • Toronto Public Libraries by increasing operation hours under the self-service project
  • the number of recreation programs at various community centres
  • 3,500 pieces of new street furniture
  • Seventy kilometres of additional bike lanes
  • Toronto's tree canopy through increased plantings and maintenance
  • new and upgraded parks and playgrounds

Under the budget plan, the city says it will freeze TTC fares, waste collection fees and development charges for 2009.

"The proposed budget maintains services and invests in the right areas," said Shelley Carroll, Toronto's budget chief. "Now is not the right time to cut programs and services.

Instead, now is the time to direct our limited resources to the areas that can have the greatest impact during difficult times."

Coun. Denzil Minnan-Wong suggested the province step in with more funds to help the city as it battles an increase in welfare applications.

City council will be briefed quarterly by the city manager on how Toronto is performing. At that point, further revisions to the budget can be proposed to respond to the economic situation.

The public is invited to speak out about the budget at an upcoming budget committee meeting on Feb. 18. Details can be found by calling 416-338-0338.

City Council will consider the final operating budget at its meeting on March 31 and April 1.

With a report from CTV Toronto's Naomi Parness