Toronto reviewing options for residential tax hikes
Crews worked on the Toronto sign ahead of the Pan Am Games in front of city hall at Nathan Phillips Square. (AP / Rebecca Blackwell)
Kendra Mangione and Dario Balca , CTV Toronto
Published Tuesday, December 15, 2015 10:32AM EST
Last Updated Tuesday, December 15, 2015 8:59PM EST
A City of Toronto committee is considering a residential property tax hike of at least 1.3 per cent, up from 0.7 per cent, to supplement its 2016 budget.
City staff released their 2016 Preliminary Tax Supported Operating Budget at a meeting Tuesday, which states that the city will spend $10.4 billion on operating costs for the year.
“We need to take a serious look at what we’re spending our money on and why,” said City Budget Chief Gary Crawford.
Toronto Mayor John Tory said the committee hopes to keep taxes low while making targeted investments in transit and emergency services.
Tory is recommending a residential tax hike increase keeping with the rate of inflation, at 1.3 per cent, which would generate $34 million to go toward the budget.
However, the current budget has a gap between expenses and revenue of $57.4 million. To bridge the gap without making cuts, the city would need to increase property taxes to 2.17 per cent.
But for Tory to make good on his campaign promise to keep property tax hikes at or under the rate of inflation, the city can only raise the tax by 1.3 per cent, leaving a $23 million shortfall in the opening budget.
"It's going to be a big challenge because there are crucial services and programs we want to protect, but at the same time, we can't raise the tax rate above the rate of inflation," City Coun. James Pasternak told CTV Toronto's Natalie Johnson.
Some of those services weren’t even included in this draft of the budget.
City staff left out $67 million of unfunded service enhancements, such as early-morning subway service on Sundays and a council-approved poverty reduction strategy.
With all these additional services factored in, the budget gap balloons to $90 million, even after a 1.3 per cent residential tax increase.
“A lot of the priorities that you’ve heard the mayor talk about over the last number of months are priorities he’s still going to be maintaining,” Crawford said. “When you look at poverty reduction…a lot of the measures included in the new enhancements will be part of that.”
Others, however, aren’t as confident in city’s ability to enhance services while keeping taxes low.
“You either have to reverse the promises you made about improving service, cut more services…or come up with more revenue,” said Coun. Janet Davis
Proposed revenue sources include a new $75 fee on top of the municipal land transfer tax, and axing the $100-rebate on extra-large garbage bins.
Suggestions are being presented in front of the committee, and a decision will be made during the meeting on Jan. 26, 2016. The decision will then go to City Council for approval in mid-February.
Replay the discussion with our live blog.