Household expenses could rise as city recommends property tax, rate hikes in 2019 budget

Toronto residents can expect a potential rise in household expenses as the city aims to balance its budget amid growing city-wide "challenges" and millions still needed in savings.

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On Monday morning, city staff released their recommended $13.46 billion budget for 2019.

It contains an overall property tax increase of 1.8 per cent — which includes a 2.55 per cent increase for residential homes, tied to the rate of inflation — along with a three per cent water rate increase and 2.2 per cent hike for garbage collection. City staff also recommend phasing out a rebate program that offers a financial incentive for using smaller garbage bins and producing less waste.

City staff say the changes could add more than $100 to an average household property tax bill, $27 to average water costs, and at least $72 for garbage collection — potentially adding hundreds of dollars to Toronto residents' yearly expenses.

The potential hikes also follow a previously-announced 10-cent fare hike proposed for transit riders, which was approved by the TTC board last week.

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City manager Chris Murray called the budget a "pragmatic and sensible approach."

It also addresses many of the "challenges" Toronto faces, such as aging infrastructure, affordable housing, and climate change, noted budget chief Gary Crawford.

During Monday's budget committee meeting, he said this was a tough budget year partly because of a municipal land transfer tax shortfall causing a drop in revenue, thanks to the recent cooling of the housing market.

Not a 'balanced' budget, councillor says

But some councillors criticized the staff recommendations for falling short.

Coun. Gord Perks said there's an issue of "magic money" — a $79-million hole that needs to be filled through unclear means.

That sum represents a combination of factors: $10 million in yet-to-be-determined city cuts, $45 million in shelter funding requested from the federal government, and $24 million in potential TTC spending reductions.

"This is not a balanced budget," said Perks, who plans to put forward a motion for a tax increase above the rate of inflation, a move at odds with Mayor John Tory's 2018 election campaign promise to avoid that exact scenario.

Speaking to reporters following the morning committee meeting, Murray said the needed savings from the city and TTC aren't "unattainable" but noted there is "no formal indication" any shelter funding is coming. On Monday, Tory was in Ottawa as part of a coalition of mayors pressuring the federal government to deliver a cash injection to help mitigate a housing crunch they say is tied, in part, to refugees.

Coun. Mike Layton said overall the "uninspired" budget doesn't offer long-term solutions on both housing and transit. He also noted the repair backlog when it comes to areas like transportation and Toronto Community Housing is actually increasing.

According to the city, this year's focus was on maintaining service levels, plus modest investments — including an additional $29.2 million for poverty reduction strategies, nearly $2 billion for city building efforts, and nearly $3 billion for environmental sustainability.

Both councillors and members of the public will have a chance to provide input on the budget before it heads for a final stamp of approval from council in March.