Toronto Mayor John Tory has proposed a property tax increase to help fund much-needed improvements to transit and social housing infrastructure in the city.

At the “State of the City” address on Wednesday, Tory said he will put forward a property tax levy of 0.5 per cent to generate revenue that will contribute to "a bigger and better city.”

“I think people are fed up with the fact that they keep seeing announcement after announcement out of city hall and the projects never happen and that is for one simple reason: there is no money set aside to pay for them,” Tory told reporters at the event. “We are beginning that process today.”

Tory said the extra tax dollars would generate $13 million in the first year and $65 million a year by the time the tax is completely phased in. All money gained from the tax hike will be placed in a “City Building Fund” as part of the Toronto’s operating budget, which in 2015, was $11 billion.

“We need to get serious about building a city of the future. That means building transit, which is the single most effective way to cut congestion, and adding more affordable housing, while repairing our existing stock,” said Mayor Tory. “People also want to know their tax dollars are being used effectively. By creating a dedicated fund for transit and housing -- we are doing just that.”

If approved, the levy would come into effect in 2017, once an existing tax levy to help fund the construction of the Scarborough subway expires. The tax increase would last five years and cost Toronto property owners and an average of $13 more per year.

At the beginning of the 2015, Tory asked various city departments to find two per cent in cost reductions in efficiencies.

“Much was found, but it’s obvious these measures don’t do enough to address the underlying issue we face and we have to be smarter and we have to adopt a different kind of discipline,” Tory said.

On Wednesday, Tory called the levy a "modest" one that would not burden taxpayers.

“I believe I am doing exactly what people expected me to do, which is to be responsible about keeping taxes low while also getting things done,” said Tory, who during his eletion campaign, promised to keep property taxes from surpassing the rate of inflation in the housing market.

Later in the day, the Toronto Region Board of Trade issues a statement expressing its support for the mayor’s proposal.

“We strongly agree with the mayor’s focus on revitalizing and building infrastructure,” board president Jan De Silva said in the statement. “This is vital to our economic foundation and long-term prosperity and must continue to be a priority.”

Ultimately, City Council will get to decide whether to implement the proposed tax increase.