Property tax hike tied to inflation
Annual tax bill to jump 2.9% in $11B budget that rejects call for more shelter beds, daycare
Council has approved an $11-billion operating budget that for the fourth year in a row keeps property taxes in line with inflation while rejecting calls to fund more shelter beds, subsidized daycare spaces and other urgent needs.
The budget passed late Monday night was much the same as the one recommended by Mayor John Tory’s executive committee, following his direction to keep taxes low, freeze spending across many divisions and fund new programs from reserve funds. The budget continues to rely on a hot housing market, which city staff and real estate experts have warned against.
Council approved Tory’s 2.1-percent hike in a 33-11vote. The increase climbs to 2.91 per cent including a dedicated levy for transit and social housing. City staff say that translates into an increase of just over $82 on an average Toronto home with an assessed value of $624,418.
“I think this budget moves us forward on every single account,” Tory said at the end of the debate. He spoke repeatedly of the hope people have, including, he said, because for the first time the city will meet its targets on affordable housing.
But according to city staff, the projected number of rental units that will be created by 2020 totalled with those that have already been built will fall far short of the goal — missing the target of 10,000 units by half.
“We have a lot of work to do on addressing a lot of these issues,” Tory said. “And if I believed that simply raising property taxes was going to provide the answer, then I would say so. But I know that that can’t work by itself.”
A motion from Councillor Josh Matlow to request the province instead share in the harmonized sales tax, passed at council with Tory’s support. But a motion to ask, if that request were refused, the province give the city the ability to implement its own sales tax to fund transit and housing lost in a19-23 vote, with Tory against.
The motion asked that the funding be spent based on demonstrated need using evidence-based planning.
“I think there’s only one option if we’re going to be leaders,” Matlow said ahead of the vote. “We have this moment in our lives where we could actually make a tangible difference in peoples’ lives.”
The mayor had promoted this budget as a “Goldilocks” plan striking a “just right” balance between spending on services and the fiscal restraint demanded by Torontonians.
On Monday, Councillor Mike Layton called that thinking just “dead wrong.”
“There’s no too hot or not too cold for things like shelters,” Layton said. “The budget’s not ‘just right’ when you have people sleeping outside and waiting for housing.”
Council committed funding to the first year of a plan to create1,000 new shelter beds over three years, with a first instalment of an additional 281 this year. But advocates say 1,000 beds are desperately needed now, with 500 more needed as soon as possible.
A motion from Councillor Kristyn Wong-Tam — who has been at the forefront of a council push for more shelter space — for staff to make ef- forts to expedite the creation of those 1,000 beds this year carried with Tory’s support.
The practice of setting the tax rate first, and then crafting the budget it funds, was started by then-mayor Rob Ford, and continued by Tory, as a way to limit attempts to add spending. Council then started debating what actually gets funded in the proposed $11-billion spending blueprint — the last before Tory and many of his council colleagues seek re-election in the October municipal election.
His budget chief, Councillor Gary Crawford, touted more than $50 million in new and enhanced spending, including the TTC’s new “hopon, hop-off” transfer, the TransformTO climate-change plan, 825 new subsidized childcare spaces and 20,000 extra recreation spaces.
“To suggest that we need to raise taxes beyond the rate of inflation to invest in the city, I’m sorry that’s not correct . . . ,” he told council.
But council critics of the latest of years of austerity budgets accused the mayor of pandering to homeowners at the expense of middle- and low-income Torontonians.
Councillor Gord Perks tried and failed to boost property taxes by 4 per cent, saying he is weary of arguments “that if we increase property taxes (Toronto) will not be affordable.”
“That is absolutely 100 per cent backwards, wrong, upside down and incorrect . . . ,” he added. “If my motion passes, the half of Torontonians who are tenants do better financially because child care and transit cost money and if those services aren’t available, you have to do something even more expensive — get a car, rely on private child care. When we spend public money we provide services that save people money.”
The annual budget grind came to a dramatic halt soon after the meeting started when members and supporters of Ontario Coalition Against Poverty rose from their seats and began yelling. “Hey John Tory, add more beds or you’ll be sorry!” some chanted as police and security officers moved toward them and started asking people to leave.
While past similar disruptions have seen protesters start to file out after a few minutes, this time they refused to leave, and security order the entire chamber cleared. Some people were dragged out.
With Tory’s council-supported spending freeze, the budget for most programs and services won’t keep up with inflation — effectively mandating nearly across-the-board cuts.
“That is the hardest part getting that apartment,” said Hird, who described living inside the Better Living Centre, as “scary.” With files from Emily Mathieu