Toronto faces $26B infrastructure gap over next decade

Toronto will need to find billions more over the next decade to maintain its transit system, social housing and libraries, says a new report on the city's aging assets headed to a key committee Tuesday morning. 

The update on the city's corporate asset management plan is a snapshot of more than $73 billion worth of city property across 25 divisions and agencies. And while it concludes that most is currently in "fair" condition, more than $40 billion is needed to maintain current service levels over 10 years. 

The report identifies an additional $26 billion gap in funding required so those assets don't degrade to the point of impacting current service levels over the next decade.

Councillor Gord Perks said the report highlights the structural nature of the city's financial problems.

"Frankly, I'm terrified," he said.

"What we have learned is that to keep our infrastructure in working order so we can deliver services over the next 10 years, we need $40 billion. Our current capital plan is about a third of that."

The report is required by the province and lists the growing needs of Toronto's facilities, fleet and equipment. It does not include other assets like the city's roads, bridges and water and wastewater system. 

Earlier this year, city staff said Toronto's state of good repair backlog was projected to shoot up from $10.6 billion to $22.7 billion by 2033.

City staff say inflation, high interest rates and a labour shortage all contribute to the problem and mean the city needs to be strategic about how it spends its $49 billion capital budget.

Toronto's state of good repair reflects the health of its $181 billion in assets. That ranges from roads and bridges to transit vehicles to public housing and parks. All need upkeep, repairs and replacement at times to ensure they remain functional. 

Staff say this latest report will act as an important planning document and help access additional funding from other levels of government. 

"Three consecutive city managers have told council, and we've told the federal and provincial governments, we can't keep going this way," Perks said. "We have a structural problem."

Councillors call for more help

The city has received funding recently from both levels of government to cover some housing and transportation costs. 

The federal government has contributed hundreds of millions to the city in recent months to help build housing and provide shelter services for refugees coming to Toronto.

Last year, the city struck a new deal with the province which will result in billions of financial relief to Toronto and will see Ontario upload the Gardiner Expressway and Don Valley Parkway. That upload is subject to a due diligence study council could hear back about this summer.

Councillor Josh Matlow said the report highlights that the city will need more help from both levels of government.

"I believe that Toronto, Ontario and Canada need to get their act together, work together better and invest together into the success of the city, which currently isn't maintained well enough," he said.

Matlow said the report further illustrates the city's need for additional ways to raise revenue. The city would need permission from upper levels of government to charge a sales tax or to obtain a portion of personal income taxes, revenue tools that raise significant cash and grow with the economy. 

"We made some progress with the province recently with the upload of the DVP and the Gardiner, but that's not going to cut it," he said. 

"In the long term, we need a completely different financial and governance arrangement with the province to ensure that transit and social housing has proper investment."

Deputy Mayor Jennifer McKelvie, who chairs the city's infrastructure committee, said the findings in the report aren't a surprise. The city is trying to pull its weight in addressing the growing gap by charging residents a special "city building levy" every year to address infrastructure needs. 

"We have aging infrastructure in our city that needs considerable investment," she said.

The city also hiked property tax by 9.5 per cent, a level not seen in decades, to help address a $1.8 billion deficit last year.

"Municipalities everywhere are asking for a new fiscal deal because we receive 10 cents of every dollar of taxes collected in this country," McKelvie said. "And yet municipalities maintain 60 per cent of the infrastructure."