The City's Budget Committee met on January 23 to make changes to the 2018 preliminary City budget before passing it on to the Mayor's Executive Committee and then Toronto City Council for final votes. Heeding strong community calls for proper funding of vital services, the Budget Committee voted to fund several additional programs.
Faith Leaders Hold 'Hunger Games' at Toronto City Hall, calling for change to a budget process that pits underfunded critical city services against each other, January 2018
- Arts and culture programs including new funding for community arts grants; makes good on City's commitment to achieve $25 per capita arts and culture funding; City to embark on new arts and culture plan
- Up to 20,000 new recreation spaces - the waiting list is at nearly 200,000
- Reversal of prior funding cuts to two community pools - Centennial West and SH Armstrong
- Swim to Survive program for 4th graders - phase 3 of 5 funding is included; still need phase 4 and 5 funding to include all the kids
- Expansion of the tree canopy with funds from reserve accounts
- Work to support distressed retail areas, part of the poverty reduction strategy
- Tenants First TCHC implementation plan
- Additional funding for shelters, winter respite and homeless services, including a commitment to add 1,000 new shelter beds over three years - all signs say we need those beds now
- Establishment of Indigenous Affairs Office
- Anti-Black Racism Action Plan
- Four new social development projects under the Community Partnership and Investment Program
- Equity responsive budgeting and evaluation of the poverty reduction strategy
- Reduced cost transit passes - phase 1 of 3 supports OW and ODSP recipients who don't already receive transportation support
- Two-hour transit transfer and $1 million to reduce overcrowding on transit - even with these funds, City projects continued overcrowding
- AODA compliance work - initiatives to make the City more accessible for people with disabilities and required by law under the Accessibility for Ontarians with Disabilities Act
- Student Nutrition Program expansion to an additional 20 publicly funded schools and more money for food budgets to improve existing programs
- Student immunization program
- Toronto Urban Health Fund expansion - year 3 of 5-year plan
- New youth hubs in libraries
- Expansion of wi-fi hot spots that improve internet access in low-income communities
- Expanded Sunday library service
- 825 new child care subsidies and more funding for child care to reduce parent fees
- New funding for Transform TO, the City's climate change action plan
For more details, find the motions here
All in, the Budget Committee added about $110 million to the budget to pay for new and expanded programs and services.
Where did that money come from?
About half of it came from the provincial government with some funding from the federal government as well. The provincial and federal governments had fully committed these funds before the budget process had even started but these funds were not included in the preliminary budget. Any program areas with new provincial or federal funding that also involved new municipal funding (like child care or public health programs) were excluded from the preliminary budget. As expected, these committed funds from senior orders of government have now been moved into the budget.
The City of Toronto is contributing just over $50 million in municipal revenue toward these new programs and services. That equates to about 0.5% of the overall City budget of $10.97 billion. Put another way, for a person with an income of $40,000, it would equate to coming up with $200 in 2018 or less than $4 per week. On the scale of municipal finance, it is a small contribution toward a better city.
The City's contribution came from assessment growth, an increase in projected revenue from the land transfer tax, reserve accounts and some funds that had not been allocated at the beginning of the budget process. During the budget process, city staff get the final assessment rolls which list all of the residential and non-residential properties in the city and reflect the value of these properties. When they get these final figures, they are better able to calculate the revenues that will be generated from property taxes in 2018. When the city grows with the development of new neighbourhoods, property tax revenues also grow. Those revenues should be used to service those new neighbourhoods and residents in new buildings, but current practice is to use the additional funds to plug holes in the budget and stretch existing resources to support residents in new developments.
During the budget process, city staff also find out the final revenues generated in the previous year from the municipal land transfer tax. The City generated more funds that expected from the tax in 2017 and have increased projected revenues from the land transfer tax for 2018. Some Councillors have raised concerns about the City's reliance on revenues from red-hot real estate markets. Sooner or later, the real estate market will slow, reducing revenues generated for City services. What happens then? The City has other options to diversify revenue sources, including revenue tools made available through the City of Toronto Act, but are not utilizing them.
The City has several reserve accounts where they save funds, sometimes for specific purposes such as child care or shelter or to balance the budget in difficult economic times. The challenge with using reserve accounts for new and expanded programs and services is that these are one-time, unsustainable funds. Relying on reserve accounts will present financial challenges in future years if those funds are not replenished.
Does This New Funding Solve All of Our Problems?
Sorry, but no. Crises and major challenges remain for the city moving forward.
- The homeless and affordable housing crisis is acute. The City has added substantial funding on the shelter side but plans to introduce 1,000 new permanent shelter beds will happen over three years when they are much-needed now. The City has over 1,700 affordable rental housing units in development but only anticipates an additional 525 will be completed this year. Meanwhile, it expects that the affordable housing waiting list will grow to over 100,000 households this year. That leaves struggling residents with long waits for affordable housing. Every order of government needs to ramp up its funding for affordable housing to address this crisis. Otherwise, we can expect homelessness and the need for emergency shelters to continue to grow.
- Overcrowding and inadequate transit service will continue in 2018. After years of inaction, we have a lot of ground to make up to address the inadequacy in the public transit system. One million toward improved transit service does not go far enough.
- Toronto child care fees are the highest in the country. The waiting list for subsidized child care is over 12,000. An addition 825 spaces this year will help but we have a ways to go. Even when families have money to pay, there are long waits to get a child care space at all. We are moving forward on child care because of provincial and federal commitments. But the current budget only includes $2.1 million in municipal funding, well below its committed 20% contribution. This is no time for the City to reduce its contribution to improving the child care system.
- The wait list for recreation programs - at almost 200,000 - will remain high even with the addition of 20,000 spaces covered in this year's budget. User fees are going up again this year, and the Welcome Policy which subsidizes recreation programs for low-income residents is being cut.
Toronto City Council still has time to make changes to this year's budget to respond to the ongoing crises and challenges facing residents. The Mayor's Executive Committee meets on February 6 to review and make its changes to the budget. City Council has the final say at its February 12 and 13 meeting.
There is also still time for community members to call for better programs and services. The recent improvements to the budget wouldn't have happened without strong community calls for action on homelessness, public transit, climate change action, equity and inclusion, recreation, child care and more. Contact your City Councillor. Every Councillor has constituency hours where you can drop in. Call 311 for contact info.
Upcoming Councillor Budget Town Halls:
- Monday, January 29 – Wards 19 & 20 Councillors Layton & Cressy – 6:30 pm Scadding Court Community Centre
- Monday, January 29 – Ward 22 Councillor Matlow – 7-9 pm Greenwood College, Room 174
- Monday, February 5 – Ward 26 Councillor Burnside – 7-9 pm Leaside Town Hall (includes budget and other issues) 1073 Millwood Rd
CORRECTION: Please note that Ward 21 Councillor Mihevc will not be holding a town hall. Information circulated previously was in error. Apologies for the confusion.
Next week, we'll be releasing further analysis on the 2018 City budget. Stay tuned!