Toronto

Chow's first budget proposes 9.5% tax hike, full funding for Scarborough busway

Toronto Mayor Olivia Chow is proposing the city raise property taxes by 9.5 per cent as part of a 2024 budget aimed at filling a nearly $1.8 billion budget shortfall.

Proposal provides Toronto police with smaller increase than service requested

Mayor Olivia Chow
Mayor Olivia Chow released her draft budget for the 2024 fiscal year Thursday. Council will vote on a finalized budget on Feb. 14. (Evan Mitsui/CBC)

Toronto Mayor Olivia Chow unveiled on Thursday a $17 billion draft budget for 2024 that includes a massive tax hike and hundreds of millions of dollars in savings while also making new investments in affordable housing and transit.

In her first draft budget as mayor, Chow is proposing the city increase property taxes by a historic 9.5 per cent to raise badly-needed revenue to fill a nearly $1.8 billion shortfall. Other key items include fully funding a busway for Scarborough transit riders and a smaller increase to the Toronto police budget than the service requested.

The property tax increase is necessary, Chow says, to fill that budget gap while maintaining funding for vital city services.

"We can't avoid hard choices anymore," Chow said at a press conference in Scarborough. 

"So I'm fixing the financial mess and getting Toronto back on track."

Chow is recommending city council raise residential property taxes by eight per cent and add 1.5 per cent to the city building levy — a fund dedicated to transit and housing — for a combined tax increase of 9.5 per cent on property owners. 

The proposed tax increase is one per cent less than the 10.5 per cent increase city staff proposed in its draft budget, but it's still the largest Toronto has seen since amalgamation in 1998. The $42 million needed to reduce the tax rate will be covered by dipping into a reserve fund that was established to help address financially difficult times, budget documents show.

City staff previously identified $620 million in spending cuts and offsets to address the budget shortfall.

"We cannot cut our way out of this mess. If we cut deeper, we could be cutting at bone and hitting the marrow," Chow said.

"It would damage our city and we can't do that."

Coun. Brad Bradford (Ward 19, Beaches-East York) said it's "tone deaf" to table a record tax increase in the midst of an affordability crisis.

"We should be trying to find savings, not making life in the city more expensive," he said.

Draft budget sets aside $67M for Scarborough busway

The mayor's draft budget would fully fund the construction of the Scarborough busway, a series of priority bus lanes meant to replace the decommissioned Scarborough Rapid Transit (SRT) light rail line, at a price tag of $67.9 million. The lack of funding in the staff budget drew criticism from some transit advocates.

Transit advocate Shelagh Pizey-Allen said she's happy to see the mayor follow through on one of her key campaign promises, but it's "bittersweet" because the busway is just an interim measure to help Scarborough transit riders get to and from downtown until a subway extension is completed.

"It's responding to a big gap in service, but transit riders in Scarborough have been asking for this for three years," said Pizey-Allen, who is executive director of TTCriders. "We never should have had to fight so hard for something so basic."

WATCH | Chow's draft budget 'fully funds' construction of Scarborough Busway: 

Mayor Olivia Chow’s draft budget ‘fully funds’ construction of Scarborough Busway

4 months ago
Duration 1:07
Mayor Olivia Chow presented her 2024 draft budget on Thursday, including full funding for the construction of the $67.9 million Scarborough Busway.

Chow's draft budget also includes the creation of a $50 million fund for state of good repair work, including fixing potholes and park upkeep, $100 million over three years to retain affordable housing and an additional $1.4 million for drop-in centres for people experiencing homeless on top of the $82 million increase for shelters and warming centres outlined in the staff budget.

It maintains the TTC's plan to increase transit service close to pre-pandemic levels while freezing fares and hiring over 160 highly-visible TTC workers to improve safety.

Police chief 'disappointed' with smaller increase

The mayor's draft budget does not include a $20 million boost the Toronto Police Service requested to its nearly $1.2-billion budget. Instead, it maintains city staff's recommendation of a $7.4 million increase.

Chief Myron Demkiw said he is "disappointed" with the smaller increase, saying the force won't be able to hire four classes of 90 officers and "essential civilian professionals" this year.

"Interrupting our ability to hire will impact us in 2025, 2026 and beyond, with an empty pipeline in our hiring stream to replace officers who are retiring," Demkiw said at a news conference at police headquarters Thursday. 

"We'll have to evaluate all (of) our service delivery, and look at what other essential services we're going to have to degrade or cut altogether."

Chow said earlier that the budget includes funding for hiring 200 more police officers, adding the service also has access to tens of millions of reserve funds for staffing special events and for expected pay raises when the force signs a new contract agreement with its officers this year.

WATCH | Toronto police chief reacts to Olivia Chow's budget proposal 

Toronto police chief reacts to Olivia Chow’s budget proposal

4 months ago
Duration 0:32
Toronto Mayor Olivia Chow unveiled a $17 billion draft budget for 2024 that does not include the $20 million boost that the Toronto Police Service requested. Instead, it maintains city staff's recommendation of a $7.4 million increase, which Chief Myron Demkiw described as disappointing.

Meanwhile, Toronto officials and federal government have been publicly squabbling for months over a city request for $250 million in funding for refugee claimants in the shelter system. The city's budget chief warned that if the federal government didn't cover that amount, the city would have to raise taxes by an additional six per cent.

On Thursday, Chow expressed optimism that the city will be able to continue to shelter the 6,000 or so asylum seekers, after Immigration Minister Marc Miller said Wednesday that an additional $362 million will be available made across the country to address the situation. Miller said Quebec will receive $100 million of that funding, but he didn't say what Toronto would receive. 

"There will be more to come in terms of all of the details of how much and when," Chow said. "You will hear some news soon."

Questions also remain about a popular snow clearing service that city staff put on the chopping block in their draft budget earlier this month. The cut to windrow clearing would affect more than 262,000 homes in the city's suburbs, and councillors who represent those wards want it saved. 

In a letter to her colleagues, Chow says she has allocated $8 million that council can divvy up for additional priorities, such as windrow clearing, more funding to festivals, the arts or community safety. In its existing form, the windrow clearing program costs about $16 million annually, staff said earlier this month.

City council will finalize the budget meeting at a meeting on Feb. 14.

ABOUT THE AUTHOR

Ryan is a reporter with CBC Toronto. He has also worked for CBC in Vancouver, Yellowknife and Ottawa, filing for web, radio and TV. You can reach him by email at ryan.jones@cbc.ca.

With files from Shawn Jeffords