Toronto’s budget chief is defending the city’s financial blueprint from accusations that it is not a coincidence its lower-than-usual increase comes in an election year.
Budget season kicked off Thursday, with a staff-led document recommending a property tax increase of 0.7 per cent and a city building levy of 1.5 per cent for a tax increase of 2.2 per cent.
The increase is dramatically lower than the 9.5 per cent increase under Toronto Mayor Olivia Chow in 2024, or the 6.5 per cent increase passed last year.
It comes ahead of municipal elections in October, including for the Toronto mayor.
Critics of Chow have accused her of an artificially lower budget to win favour, while her supporters say she did the hard work in 2024 and 2025, justifying a return to lower increases beginning this year.
The numbers
- Tax increase: 2.2 per cent
- Water levy increase: 3.75 per cent
- Waste levy increase: 3.75
- Average increase cost: 91.53
On Thursday morning, staff outlined their proposed 2026 budget to city counicllors and the public.
It proposes a 0.7 per cent increase to the general property tax rate and an extra 1.5 per cent for the city’s building fund. The combined average impact of the property tax increase for homeowners will be $91.53 over the course of the year, the city said.
“I hope council will have a look at this budget, look under the wood, and what they’ll find is it’s built on a strong foundation,” Coun. Shelley Carroll, the budget chair, said on Thursday morning.
The water and waste levies homeowners will pay are both set to increase by 3.75 per cent.
The city’s operating budget has inched upwards from last year to a total of $18.9 billion for 2026. The 10-year capital plan sits at $63.1 billion.
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The city also said the provincial government’s decision to scrap automated speed enforcement led to $99 million in unexpected lost revenue, while declining ridership on transit leaves a $39 million hole.
Staff said that enforcement costs had also dropped for speed cameras, along with an infusion of provincial cash, leaving the program broadly net neutral.
The cost of operating Toronto’s transit agency is the largest line in the city’s operating budget, followed by police and then housing and shelter services.
New measures
Despite the pressures, the city says it is still proposing to increase some services.
It will cap fares on the TTC, as well as impose a transit fare freeze for a third consecutive year. Toronto will also add 27 new traffic agents to try to unclog downtown routes like King Street.
More libraries will open seven days per week, while social workers and crisis workers will be added to an additional four branches.
It also includes funds for Toronto police and paramedics to hire more staff.
As part of its plan to pay for those services, the city will draw $1.7 billion from its reserves — up from roughly $1.3 that it took out last year.
The city’s 10-year capital plan will focus on repairing existing assets. Roughly 53 per cent of the $63.1 billion will go to repairs, the budget explains.
The cost of the 10-year capital plan is an increase of six per cent compared to last year. Water is the largest spending commitment for the plan, followed by transit, then housing and general transportation spending.
“Families are feeling the squeeze from the high cost of living,” Toronto Mayor Olivia Chow said. “That’s why I’m focused on making life more affordable for Toronto families.”
Under Ontario’s strong mayor system, this first draft of the budget is not officially written by the mayor. Olivia Chow will have until Feb. 1 to propose her own version or veto amendments from her colleagues.
Election looms over budget
The upcoming municipal election – to be held on Oct. 26 –will likely weigh on the minds of many around the council table as the process unfolds.
Coun. Brad Bradford has announced he will run for mayor, while Chow has neither confirmed her intention to run nor ruled it out.
“It’s one budget; it’s very clear that this is an election budget,” Bradford told reporters on Thursday morning. “I think that’s unfortunate because that’s why people get cynical about politics.”
Bradford didn’t give specifics of how he would approach the budget differently, but said he wanted to see a full review of what additional services the city offers above what it is required to under provincial law.
Carroll and Coun. Gord Perks, both in Chow’s inner circle, argued the mayor had done the hard work in previous years to solve issues she inherited when she took over in 2023.
“Asking people to pay the higher rates was a massive ask of Torontonians,” Carroll said. “We’re keeping a promise that that would be ank and we’d come back down to a stable increase. We hope to be able to stay there.”
Perks argued the lower rate came from reducing the city’s budget black hole.
“When Olivia Chow was elected Mayor of Toronto, the City of Toronto’s finances were in the worst shape they had been in since amalgamation,” he added. “So, we did the responsible thing and started to close that gap.”
In 2024, Chow shepherded in a historic 9.5 per cent increase, and raised taxes again last year by 6.5 per cent.
She has said she will prioritize the city’s financial health over any re-election bid, but all elected officials will likely consider the blueprint mindful of expected tough doorstep conversations on the campaign trail.
The finalized budget is scheduled to be passed at a special meeting on Feb. 10.
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