Toronto's property tax to go up 5.5% as part of 2023 budget: Tory

Toronto residents could be in for a 5.5 per cent property tax increase as the city unveiled its 2023 budget Tuesday morning.

Mayor John Tory said the increase is necessary to help sustain frontline services and make key investments in public safety, transit and emergency services as the city continues to recover from the pandemic.

That property tax increase will cost the average homeowner an additional $183 a year.

The city is also increasing its City Building Fund by 1.5 per cent, meaning homeowners will have to pay another $50 a year to that fund to help build transit and housing. 

Those estimates are based on the average home in Toronto with an assessed value of approximately $695,000.

• See the budget presentation for yourself at the bottom of this story.

City staff introduced the $16.1 billion operating budget Tuesday at a special committee meeting.

Tory campaigned for re-election on a pledge to keep taxes below the rate of inflation in this year's spending package. He said this proposed budget accomplishes that task.

"The budget delivers on that promise with a 5.5 per cent tax increase for the operating budget that is below Toronto's present 6.6 per cent inflation rate," he said.

"But I recognize it is, nonetheless, a significant increase in that we're asking people to pay more. I wish it could be lower because I know that any increased cost right now is hard for people to bear."

Water, garbage rates also headed up

Those aren't the only increased costs city residents will face. Water and garbage rates are headed up.

The average annual household increase, based on consuming 230 cubic metres of water a year, will pay $29 more.

The average single family home will also pay an additional $5 to $16 depending on the size of their garbage bin.

Budget Chief Gary Crawford said the city is dealing with many of the same inflationary pressures that regular Torontonians as costs jump for fuel, food and all goods it buys. The city needs to raises taxes to pay for those increases, he said.

"The mayor and I have kept it as low as possible," he said of the tax and fee increases. "And we're hopeful that the residents of the city will understand where we are at and why we had to make this decision."

City councillors concerned about budget shortfall

But a number of councillors are expressing concern about how the city has balanced the books, something it's required to do by law. 

The city has $1.4 billion in costs related by the COVID-19 pandemic that remain on the books for both 2022 and 2023. It's hopeful that both the federal government and provincial government will bail it out.

But if those governments don't provide the funding, the city will have to draw money from a reserve created to deal with the pandemic and possibly cancel infrastructure projects from its $49-billion, 10-year capital budget.

Coun. Gord Perks said he's concerned about the proposed budget and it's reliance on other governments for funding.

"[The budget] just assumes that billions of dollars are going to fall out of the sky from other governments to fix our problems," he said. "And if they don't, we are in very, very serious trouble."

Perks said he knows the 5.5 per cent property tax increase sounds like a big number, but slammed both Mayor John Tory for refusing to address the city's "structural deficit.

"Mayor Tory, like every mayor before him, has refused to come forward with a long-term financial plan," he said. "And because of that our services are crumbling."

Newly elected Coun. Jamaal Myers said personally seeing the budget process unfold for the first time has left him frustrated with "budgeting gimmicks" he sees playing out in the way the spending package is being communicated.

When the property tax increase and the City Building Levy are added together, they top seven per cent, and come in above the rate of inflation.

"I think we just have to be honest with people and let people know the state of the city finances and just have an honest discussion in terms of what type of city are we going to build with the balance sheets that we have," he said.

How do Tory's 'strong mayor' powers change the debate?

The powers fundamentally shift who puts the budget together.

Coun. Paula Fletcher said they make the process a "highly-political budget, rather than an administrative budget."

Previously, city staff assembled the budget and presented it to the mayor and council. The public would have a chance to weigh in and in the end council would adopt the spending package.

The new process gives the mayor control over the budget's creation, and councillors have said, to this point in the process, they have had no insight into what has been included.

Instead, the mayor has pulled specific items out of the budget and made public announcements about them.

"I don't think this mayor is going to come in with a big-cuts budget, but we haven't seen it yet," Fletcher said.

"But the role of council in smoothing out deep cuts, or changing things that might not be good for the city, that to me is at stake here."

Council also now needs a two-thirds majority to change or amend the budget. Perks said that's going to make it hard for the public and council to have an impact.

"The normal process is much more publicly open and inclusive," he said. "This all goes on inside the mayor's head."

A spokesperson from Tory's office said the budget process is "largely similar" to previous budget cycles.

"This year's budget process will incorporate input from the public and city council," Taylor Deasley said in a statement.

"The budget committee will hear both in-person and virtual deputations from the public for the first time. The time allocated for that input is slightly shorter due in part to the fact it is a post-election budget," she said. 

"This is also consistent with past post-election budgets."

How do you get involved? 

It's not too late for city residents to get involved in the budget process. Online comments can be submitted or people can attend council committee meetings in person.

Perks is urging people to attend sessions and get involved.

"They need to join neighbourhood associations and community organizations and fight for the city they want."

Toronto's 2023 budget presentation: