Stop-gap isn’t good enough

Long-suffering members of the city of Toronto’s budget committee have completed their work and produced a tepid package that doesn’t raise the property tax beyond the rate of inflation, doesn’t reduce or get rid of poverty, and doesn’t improve services in any bold or major way.

There’s little reason to cheer as this limp plan wends its way to city council for final approval in a little over two weeks.

At best it can be called a treading-water budget: it keeps city hall’s head above water, but doesn’t propel Toronto forward — and it can’t continue indefinitely.

One of the most disappointing aspects of the package, especially in light of the much-vaunted poverty reduction strategy unanimously approved by city council a few months ago, is the paltry amount of new funding allocated to help Toronto’s poor.

Councillor Gord Perks put it well this past week in a compelling speech to the budget committee, shortly before it approved this year’s spending program. “There is not a single line in this budget to increase the amount of affordable housing that the city of Toronto offers,” he said. “The most needy get almost nothing. Families trying to make a start, needing daycare, get nothing. People who are on the social housing waiting list get nothing. Toronto Community Housing gets nothing.”

Mayor John Tory’s administration argues that progress is underway, and it’s true that some improvement has been made in programs the city already runs. But critics note only $5 million — out of a budget of more than $10 billion — has been allocated to new initiatives aimed at reducing poverty. And that’s not nearly enough.

Daycare looms as a particularly big gap. Here, too, steps have been undertaken, with more licensed child care spaces coming onstream and a program that helps single moms find placements. But the poor need subsidies in order to access daycare, and this year’s budget fails to create even one extra subsidized space, says Councillor Shelley Carroll.

“The single most important thing to reduce poverty in this city is child care, and it’s something we didn’t do anything about,” Carroll, a budget committee member, said in an interview.

Councillor Janet Davis has estimated that Toronto’s poor need at least 350 additional child care subsidies this year, at a cost of about $3.5 million. As reported by the Star’s Laurie Monsebraaten, a property tax hike of just over 0.1 per cent would be enough to cover that amount — a relatively small added burden in a city that enjoys the lowest property tax rate in the Greater Toronto Area, and among the lowest in Ontario.

That status won’t change given the 1.3-per-cent property tax increase called for in the 2016 budget. (This doesn’t include an additional 0.6 per cent increase imposed through an alreadyapproved levy to fund the Scarborough subway extension.) Entirely reasonable calls for additional tax tools, such as a revival of Toronto’s $60 vehicle registration fee, have been spurned.

Rather than diversifying the city’s revenue stream, this budget goes the opposite way and puts undue emphasis on a single source of money: Toronto’s land transfer tax. Anticipated revenue from this source is pegged at about $525 million — a repeat of the record amount collected in 2015 through a feverish real estate market. The city is banking on the same this year, and even a small downturn could result in a crippling budget crunch.

Making matters worse, the books were balanced only by dipping into Toronto’s reserves for an extra $50 million. This reliance on one-time money drains rainy day funds and does nothing to fix what caused the $50-million gap in the first place. It will be back next year along with other, and growing, fiscal pressures.

In short, the current approach to budgeting is unsustainable. There’s no solution here to Toronto’s chronic underfunding. And at some point — likely not very far off — a city that’s treading water will find itself sinking below the waves.

Toronto’s 2016 operating budget falls short on several fronts