Toronto finishes 1st budget under Mayor Olivia Chow with record tax increase

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City of Toronto to finalize 1st budget under new mayor
RELATED: Toronto city council is beginning its final day of budget deliberations. The finalized financial plan will be the first under Mayor Olivia Chow. Jaden Lee-Lincoln reports – Feb 14, 2024

The final day of Toronto’s budget process was marked by protests and last-minute compromises as Olivia Chow delivered her first financial plan as mayor.

The now-official budget confirms a tax increase of 9.5 per cent across the city, meets the demands of Toronto police after a bruising advocacy campaign and includes money to build a busway in Scarborough.

The budget is Chow’s first since she was elected in June 2023, a process strong mayor powers give her significant power to shape.

The 9.5 per cent increase is the highest since Toronto amalgamated into one city in 1998.

Budget protests

The city’s budget process saw opposition to the plan from both the left and the right.

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Various small groups of demonstrators shouted from the public gallery at city hall through deliberations on Wednesday. They criticized Chow, particularly for caving to demands from Toronto police to give officers a budget increase.

One stood to demand a ceasefire in the Middle East in the ongoing conflict between Hamas and Israel and the bombardment of the Gaza Strip. They also demanded council “stop the war on the poor,” as multiple security guards carried them from the chamber.

Another said they had been an NDP supporter but had been let down by Chow.

The mayor said she had created a budget that did increase spending in the city and meet her key priorities.

“We’re opening up more warming centres, the respite centre, 24/7 — a lot more,” she said on Wednesday. “If you look at the shelter and housing budget, (they) have risen dramatically.”

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On the other side of the debate, critics have called on the mayor to lower the tax increase, with some former councillors and candidates calling the increase “harmful” to the city and its residents.

“The planned increase of 9.5 per cent is too much to bear for people struggling during this affordability crisis,” an open letter issued in February said.

“This is the biggest tax increase in Toronto’s history. It is unfair, unreasonable, and unacceptable.”

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Last-minute changes

Amidst demonstrations and opposition, the budget also saw some last-minute changes on its final day.

The most notable change was a decision from Chow to lend her support to a plan to give Toronto police the full budget increase they had requested.

In December 2023, the Toronto Police Service said its proposed net operating budget for 2024 was $1.186 billion — a $20-million increase from the 2023 approved budget. Chow had initially said she would give police less than half of the additional money they had asked for.

A bruising advocacy campaign followed, with both the Toronto Police Service and the Toronto Police Association framing the decision as a key public safety call, highlighting poor response times in the city.

The chief used the force’s official social media accounts and media interviews to demand Chow reconsider, while the union took out a series of adverts.

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On Tuesday, Chow relented and said she would grant that full increase, which means finding another $12.6 million in the budget.

The plan agreed with councillors Wednesday will see that money taken from reserve funds, which are used to store money for the future. The city hopes either the federal or provincial governments will cover the cost.

Budget chief Shelley Carroll issued a warning to police as she voted in favour of their increase, saying councillors expected to see results from the new money.

“If I look at their campaign, what they said was ‘response times was the issue,'” she said.

“I know that as we vote for this increase today that we as council can watch for that response time to go down. That’s what they said they needed, and so today the fact that they’re getting it means that we can all work together to see those response times change.”

Last-minute motions also saw just over $4 million given to windrow snow clearing and $200,000 for Black Creek Pioneer Village, a small boost for bylaw enforcement and more resources to maintain trees.

Other budget priorities

The new budget will boost and maintain money in other key areas.

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In particular, the city will see an increase in spending on transit in Scarborough, with plans to fully fund the conversion of the Scarborough RT into a new busway.

Chow said the city will pay to replace the now defunct line with a busway. That is still in the planning phase and may not be delivered until 2027, staff said in a recent report.

The mayor unveiled her version of the city budget on Feb. 1, an amended version of a document released by city staff and the budget chief in January.

Chow’s plan made some changes to the initial budget, including more staff for rental enforcement workers and an increase in spending on warming centres.

Around 30 per cent of Toronto’s $49.8 billion capital plan over the next decade will be spent on water, 24 per cent on transit and 15 per cent on housing.

Toronto police, transit and social programs are among the most expensive items in the city’s $17-billion operating budget.

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