Toronto’s finances will continue to rely heavily on federal and provincial government for its 2021 budget and beyond, with $1.6 billion needed for supports this year.
The launch of Toronto’s budget process on Thursday came with a warning from the city’s budget chief that this will be among the hardest financial years in Toronto’s history.
Toronto’s $13.95 billion operating and rate supported budget will rely on $1.6 billion in federal and provincial supports. Chief Financial Officer Heather Taylor said $740 million has already been secured.
While Taylor sounded optimistic the remaining money would be secured, in recent days Mayor John Tory has stepped up pressure to secure funding commitments from upper levels of government.
For Toronto homeowners, taxpayers will be paying an average of $69 more on their 2021 bills.
Taxpayers will be paying about $22 more on property taxes on an increase held at the rate of inflation. The city building levy, now in its second year of funding transit expansion and housing, will add an extra $47 to the average household. For a home valued at $698,000, a homeowner’s average property tax bill will be $3,201 in 2021.
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Along with the operating budget, which goes to the day-to-day operations, staff have presented a $44.7-billion 10-year capital budget which concentrates on city building.
City Manager Chris Murray said along with challenges added from COVID-19, the city still needs to plan ahead to make Toronto better. This includes addressing inequity through its programs for women and BIPOC communities while still focusing on climate action and the health and well-being of residents.
Toronto plans on spending $22 million dedicated to building a better city, which will include expanding programs like the Fair Pass program, housing projects, and police reform. The City is also committing to continue COVID-created programs like ActiveTO and CafeTO.
While the City is asking for financial support, it has found its own savings to help make up for the pandemic shortfalls. Murray said the City has found $573 million in savings, up about $40 million from efficiencies found in 2020.
Municipalities are required by legislation to submit balanced budgets and cannot run a deficit. Toronto City Council is scheduled to approve the 2021 budget on Feb. 18.
Even with the massive funding hole, Taylor said the city could submit its budget without funding commitments from Ottawa and Queen’s Park. She compared it to previous years where there were financial gaps expected to be filled by the federal government, such as costs associated with housing asylum seekers.
If the money doesn’t come through, Taylor said the city would have to rely on contingency plans.
This may be a precarious budgeting year, but staff said 2022 could face shortfalls between $1.1 to 1.8 billion.