Olivia Chow's new budget features 6.9% tax hike to pay for bolstered services
Proposed budget includes $18.8B in operating expenses, $60B capital plan
The first version of Toronto Mayor Olivia Chow's budget for this year features a proposed 6.9 per cent tax hike for homeowners to help fund $18.8 billion in operating expenses she says are aimed at improving key city services.
That includes a 5.4 per cent property tax increase and the annual 1.5 per cent "city building fund" levy, a tax introduced in 2016 that goes toward major infrastructure projects.
The combined increases would amount to an additional $268 annually for the average homeowner in Toronto, according to budget documents released Monday.
"I know the stakes are high," Chow said at a morning news conference as she outlined her spending priorities, adding that she recognizes many people are struggling with the high cost of living.
Improved services will include more frequent and reliable TTC service with no fare hikes, extended Sunday hours at 67 public libraries, and pools and wading pools with longer hours through the summer months, she said. The budget will also see increased spending on affordable housing programs, tenant protections and emergency services — particularly the Toronto Police Service, which has asked for an additional $46.2 million in its 2025 budget.
"This proposed budget will mean change in Torontonians' lives today," Chow said.
The potential tax increase comes on the heels of last year's historic 9.5 per cent property tax hike, the highest in decades, that was partly used to close a $1.8-billion budget hole left over from the COVID pandemic. With 2023's seven per cent increase, taxpayers will have seen a roughly 24 per cent increase in their municipal tax bill in the last three years.
Unsurprisingly, the idea of raising property taxes again received some pushback Monday.
Coun. Brad Bradford was critical of the proposal, given that many Torontonians continue to struggle with the cost of living. In a post on X, formerly Twitter, he questioned what an increase would actually accomplish.
"What are Torontonians getting in return? Rising costs, stagnating services, and a city government that has been overrun with bureaucracy," he posted Monday afternoon. "If the city's budget isn't focused on affordability and real change that will benefit residents, what are we actually paying for?"
This year's "opening pressure" — the money needed to maintain services at existing levels — is roughly $1.2 billion. To fill that gap with property taxes alone, the city would need to impose a 26 per cent hike, according to city staff. Toronto is required by Ontario law to present a balanced budget by the time council finalizes it in February, the municipality cannot run a deficit.
According to a budget presentation from the city manager and chief financial officer, the two biggest areas of spending from property taxes are public transit and policing, representing about $810 and $708 from the average annual bill.
The 2025 budget proposal also includes $18.8 billion in operating expenses, the largest-ever 10-year capital plan with nearly $60-billion in scheduled spending and roughly $680 million in "savings and offsets."
The boosted operating budget is about $1.8 billion larger than last year. Of that additional spending, roughly 45 per cent comes from federal and provincial funding delivered via the city. Meanwhile, 89 per cent of additional spending taken directly from city coffers would go toward public transit, emergency services, Toronto Community Housing and recent and ongoing labour agreements, city staff say.
The capital plan is $9.8 billion larger than 2024, with city staff recommending that more than half of it be spent on Toronto's behemoth state-of-good-repair backlog. The backlog stood at $9.4 billion last year and is projected to grow to nearly double that figure by 2034, though that forecast is actually 29 per cent lower than in the 2024 budget.
About $1.9 billion of the proposed new spending on state-of-good-repair comes from uploading the Gardiner Expressway and Don Valley Parkway to the province, which city staff says was the "single-largest liability" in the existing backlog.
In all, the proposed budget also includes $94 million in new spending that the city says reflects priorities laid out by residents during public consultations and an online survery last October, among them calls for a focus on new affordable housing, improved community safety and climate action programs.
Some of the new investments include:
- Funding to feed 8,000 more students through school food programs.
- Support for 300 additional households via the Rent Bank program.
- Hiring 276 more emergency services positions, including police officers, firefighters and paramedics.
- More funding for youth violence prevention programs.
- Enhanced cleaning at the city's parks and recreational facilities.
Part of the proposed spending would be funded by recently approved 3.75 per cent increases in municipal water and garbage rates.
Have your say
The release of the mayor's proposed budget on Monday is only the start of a weeks-long process that includes public input and information sessions, and council debate.
There are two telephone town halls scheduled for:
- Jan. 15 from 7 p.m. to 8:30 p.m.
- Jan. 23 from 7 p.m. to 8:30 p.m.
Chow and budget chief Coun. Shelley Carroll, along with senior city staff, will be available to field questions from the public during these events. Residents can call 1-833-380-0687 toll free to participate.
Residents can also speak to the budget committee directly on two dates at locations across the city, during meetings that will be held from 9:30 a.m. to 12:30 p.m., 1:30 p.m. to 4:30 p.m. and 6 p.m. onwards on:
- Jan. 21 at Toronto City Hall, Committee Room 1, 100 Queen St. W. and the Scarborough Civic Centre, Council Chamber,150 Borough Dr.
- Jan. 22 at the Etobicoke Civic Centre, Council Chamber, 399 The West Mall and the North York Civic Centre, Council Chamber, 5100 Yonge St.
Speakers are asked to register and indicate a preferred day and time slot by emailing buc@toronto.ca or calling: 416-392-4666 before 4:30 p.m. on January 20.
Written comments can be submitted to the budget committee by emailing buc@toronto.ca or by mail at the following address:
- Attention budget committee, Toronto City Hall, 100 Queen St. W., 10th floor, West Tower, ON M5H 2N2.