Toronto councillors considering water and garbage rate hikes

Toronto's water and solid waste rates could be headed up next year, with city staff recommending a 3.75 per cent hike to cover the increasing cost of those essential services.

In a report headed to Mayor Olivia Chow's executive committee next week, city staff recommend councillors hike the fees paid by home owners and businesses in the city. The rate increase would take effect on Jan. 1 if approved by city council later this month.

Budget Chief Shelley Carroll defended the proposed increases as necessary to help maintain the city's water system.

"The water rate is inching up, but it's to avoid debt, " Carroll said. "And it's to do very important work across the city." 

The proposed hike for water rates would mean the average home consuming 230 cubic metres a year will be billed $39 more, with the cost jumping from from $1,039 in 2024 to $1,078 in 2025. That same rate hike of 3.75 per cent is also being recommended for businesses.

Staff say the increases are needed to cover "inflationary increases ... such as costs of labour, energy, utilities and materials."

Water rates are used to fund billions in needed capital work on sewer upgrades and flood mitigation. It's increasingly important work as the number of extreme weather events hitting Toronto grows, Carroll said.

"If you're talking to someone who badly needs Toronto Water to get on with the basement flooding mitigation work in their neighborhood, they will say, 'yes, we need to do this,'" she said. 

WATCH | What's slowing Toronto's flood mitigation work: 

Here's what's slowing Toronto’s flood prevention work

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In July, Toronto was hit by a severe storm that caused almost a billion dollars in damages. In the first of a three-part series, CBC’s Shawn Jeffords examines what the city is doing to prevent flood damage.

The cost of garbage bins could also increase by 3.75 per cent. The annual fee for a single-family small bin could jump by $11.07 to $306.36. The cost of a medium bin could increase by $13.44 to $371.91 and the price for a large bin could increase by $18.26 to $505.12. The fee for an extra large bin is set to jump by $21.18 to $585.89.

The increase in solid waste rates is expected to raise more than $13 million for the city, while the water rate hike is expected to generate over $53 million for Toronto Water.

Changes come ahead of city budget launch

The proposed hikes come a month ahead of the formal launch of Toronto's budget process, as the city faces a $1.2 billion budget shortfall for 2025. That figure is down from Toronto's $1.8 billion deficit headed into the 2024 budget, which resulted in Mayor Olivia Chow proposing, and council adopting, a 9.5 per cent property tax hike.

All municipalities in Ontario must balance their budgets by law.

Coun. Brad Bradford said while the water and solid waste increases fund essential services, the city must look for other places to save. The city could improve procurement to save money and cut down on cost-overruns on projects, he said.

"There are folks out there that will say, you can increase the taxes a little bit, but I want to see better services for it," he said. "Right now, Torontonians are paying more and getting less, and I think that's unacceptable." 

Coun. Parthi Kandavel said he's hearing from residents in his Scarborough ward that they supported last year's 9.5 per cent tax hike, but expect better service delivery and responsiveness from the city.

"That was what we were hearing last year," he said. "I don't think things have changed. The same affordability and sensitivity to costs are still there."

The increases will be debated at the same meeting as the results of a city survey released earlier this month asking residents about life in the city. The online Ipsos poll of more than 1,100 Torontonians found that half say their quality of life has worsened over the last year, largely because of the higher cost of living.

"I think what people are saying is times are tough," City Manager Paul Johnson said of the results. "Certainly, affordability is something that comes out here."

Housing, transportation and crime are the issues city residents want addressed in the city spending package for 2025. Johnson said the survey can be used to help plan the budget.

 "What's great about this survey is there are very specific things we can do."