TORONTO -- Toronto city council has voted in favour of a 2021 budget that Mayor John Tory has called "the most difficult" in the city’s history due to the ongoing financial impacts from COVID-19.
Council approved the $13.98 billion operating budget and $44.7 billion 10-year capital budgets early Thursday evening following a debate that dragged on for most of the day.
The operating budget includes an inflation-based, 0.7 per cent residential tax hike, which is the lowest of Mayor John Tory’s tenure.
It is also balanced on the assumption of hundreds of million in assumed funding, which has not yet been promised by the federal and provincial governments.
Earlier in the day Coun. Gord Perks did attempt to get the budget sent back to staff and reworked to include new investments in universal childcare and an emergency housing program. His motion, however, was ultimately defeated by a vote of 20-6.
“I just think we have to get away from this default position that says that when things aren’t adequately funded, no matter what they are, that you should raise taxes. Instead, we should be making sure that if we are going to have this outdated constitution that says who is responsible for what then lets put the responsibility where it belongs (on other governments),” Tory said during Thursday’s meeting.
The property tax hike approved by council on Thursday will cost the owner of an average priced home valued at $698,000 an additional $69 in 2021, once you tack on a 1.5 per cent increase to the city building levy that was approved back in 2019.
That is much less than the $130 increase on the average property tax bill in 2020.
Tory said on Thursday that he was “proud” of the “modest tax increase,” calling it “reasonable, bearable and appropriate.”
Some members of council, however, did lament the fact that the relatively modest tax increases would make further investments in services impossible.
“We are letting a principle of keeping property taxes low guide our investments in this budget,” Coun. Mike Layton said. “Property taxes are not a good tool, I get that. But in the absence of other governments doing that work we can’t just sit back and say well it is their fault. Let’s not let their lack of action dictate what services we provide in the city.”
Budget is balanced on basis of hundreds of millions in assumed funding
Staff have said that they embarked upon this year’s budget process facing a staggering $2.2 billion shortfall but were able to partially close the gap by finding $573 million in savings and efficiencies.
They say that the remaining financial pressures related to the pandemic can be offset through $740 million in Safe Restart funding that has already been secured and another $649 million in assumed funding that the city hopes to receive from other levels of government in 2021.
“This is a responsible budget that does the right thing during these very tough times,” Tory told reporters earlier in the day, noting that it was “the most difficult” budget year in Toronto’s history. “It preserves and protects city services that people relay on, including some of the most vulnerable citizens in our city and it invests more in key areas of impact of COVID-19 across the city.”
The city faced $1.8 billion in operating pressures in 2020 due to the COVID-19 pandemic but was able to fully cover that loss through $534 million in savings that it found on its own and funding from a $19 billion federal fund to help provinces and municipalities restart their economies.
The budget for 2021 warns that the TTC alone will face an additional $796 million in financial pressures due to the pandemic this year. The city will also have to fork out an additional $281 million in order to help maintain physical distancing in its shelter system.
The budget also includes roughly $8 million in new spending on community programs in areas of the city that have been hardest hit by COVID-19.
The biggest chunk of the money – about $3 million – would go towards providing about 400 more young people with access to an existing youth jobs and training program.
