As Toronto’s finance officials try to thread the needle between a lower-than-expected tax increase and keeping the city running, they’re looking to stay positive about next year.
Earlier this month, staff unveiled a draft version of Toronto’s 2026 budget with a 2.2 per cent tax increase, made possible through a large draw on reserve funds, new efficiencies and deferrals on some projects.
It also relied on hundreds of millions of dollars in operating funding from the provincial government that is set to expire at the end of this year.
An agreement between Mayor Olivia Chow and Premier Doug Ford, referred to as Toronto’s new deal, was signed in 2023.
It saw Queen’s Park take over the Gardiner Expressway and help pay for new subway cars, lifting billions permanently from Toronto’s budget.
It also included operating agreements. There was $200 million per year for homelessness and $110 million for transit operations. The terms of the deal mean they’re up for renegotiation this year, with no guarantee they will be renewed.
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During the budget launch, the city struck a positive tone.
“We are projecting that, in partnership with the provincial government, we will be true to each other’s word that this was the year to think about where we go next,” City Manager Paul Johnson said.
“We’ve anticipated that the kinds of investments that the provincial government … have made — that in some way, shape or form they will continue. Will they be the exact things that happened in version 1.0? It may not be. It might be in different areas.”
Budget Chief Shelley Carroll wouldn’t be drawn on the details but suggested she thought talks were going well.
“I’m going to leave that to the CFO because he’s largely leading those talks and negotiations,” she told reporters.
“Right now, they’re in the review phase, they’re looking at where we stand today. I don’t want to presuppose any of that. I’m just pleased it’s a healthy conversation just now.”
The provincial government, however, is offering less reassurance.
Minister of Municipal Affairs and Housing Rob Flack told Global News he hadn’t discussed any of the details of a new deal with Chow, as the city enters an election year.
“I don’t have anything in my schedule to talk about it, but I’m in regular communication with Mayor Chow, and I’m sure we’ll be talking about it very shortly,” he said.
Flack wouldn’t be drawn on what — if anything — might be on the table for Toronto.
“I don’t want to get there because we’re not there,” he said when asked if something similar to uploading the Gardiner would be considered. “Let me talk to her team and keep you posted.”
Discussing the potential new deal earlier in the month, Carroll had suggested she wanted to see new taxation powers given to city hall.
Ford was quick to dismiss that idea.
“They want to tax the pants off you; they taxed us to death in Toronto enough,” he said this week. “Enough with these taxes.”
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