The Big Hole in the Budget
Two of the City of Toronto's largest agencies have major budget shortfalls - the TTC at $77.4 million and Toronto Community Housing at $31.2 million. Even with other City divisions and agencies cutting back by $18 million, City Council is still left with a $91 million hole in the 2017 City budget. The Mayor and City Council have a big decision to make - whether to bring in new revenues to address the shortfall and even improve services or implement deep and damaging service cuts on Toronto communities.
Photo credit: Loretta Lime
If no new revenue tools are adopted and property taxes are kept below inflation, we could be looking at over $100 million in service cuts as the budget already includes $10 million in cuts. To put all this in perspective, think back five years ago. Thousands of residents voiced their opposition to the 2012 City budget championed by former Mayor Rob Ford. That budget called for $88 million in service cuts. After loud community opposition to the service cuts, tens of thousands in services were saved. With over $100 million in potential cuts on the table, the 2017 City budget could be worse than the 2012 budget.
Nothing is set in stone yet. These decisions rest with the Mayor and City Council. The final budget vote takes place at City Council's February 15-16 meeting.
Focus on Housing and Homelessness
The Shelter, Support and Housing budget includes some service cuts. However, its overall budget is up 14.9% over last year - largely due to the rising cost of social housing, including Toronto Community Housing. With steep increases in hydro (43% increase for TCHC since 2012) and water (36% increase for TCHC since 2012), the cost of social housing is increasing a lot. At the same time, tenants' incomes remain low resulting in declining revenue from rent.
- Service cuts included in the budget:
- $1,047,800 staff reductions from attrition (not rehiring after someone leaves and more work for remaining staff; affects homeless and housing first solutions and social housing system management; 10.25 full-time equivalent positions)
- $795,500 "adjustment of programming support and maintenance of facilities at the Adelaide Resource Centre for Women". This includes cuts to 8 staff positions. What does this mean for the homeless and vulnerable women who access services at this centre?
- City finance staff have identified $27,742,800 in potential service cuts in the Shelter, Support and Housing budget to help fill the $91 million hole in the City's overall budget. These cuts are not included in the budget but are provided to the Budget Committee for consideration. In the end, the Mayor and City Council will decide how to balance the budget, whether through service cuts, increasing revenues or a combination.
- $18,517,900 - Elimination of homeless prevention services. This would mean the elimination of the Community Homelessness Prevention Initiative which funds 76 community agencies to provide homelessness prevention services to approximately 24,000 people. These services include "24-hour drop-ins located across the city, supports to people experiencing homelessness, interest free loans for low income tenants facing eviction, housing stabilization and follow up supports to recently housed tenants as well as a variety of other homeless prevention supports... many drop-in services which are heavily used by vulnerable people would likely close or have to fund raise to remain operational resulting in loss of jobs and adverse impacts to the City's social safety net". The City staff report notes that "withdrawal of these services may result in additional homelessness". Let's be clear - the elimination of homeless prevention and support services in Toronto where the crisis of homelessness is severe and intensifying would result in more homeless deaths.
- $4,175,000 - Reversal of Mayor's Task Force on TCHC recommendations. The 2016 City budget included partial funding to implement some of the Mayor's Task Force recommendations to improve living conditions and provide education and employment programs for Toronto Community Housing residents. This cut would reverse many of those improvements.
- $4,000,000 - Reduce funding for TCHC operating budget. This cut would reduce the funds available to operate Toronto Community Housing.
- $698,300 - Close Downsview Dells supportive and transitional housing for men with a history of homelessness who are receiving treatment for addictions issues. This supportive and transitional housing provides a home to 30 men who receive treatment for addictions nearby. It is a crucial resource to support men in their recovery efforts. The 2012 City budget proposed closure of Downsview Dells along with two other housing programs. Vocal community opposition led Council to save Downsview Dells and the other two housing programs. Clearly, we need more programs like this not fewer.
- $351,600 - Staffing cuts.
- The City budget documents project no reduction in the social housing waiting list over the next three years, and little progress on the completion of new affordable homes in Toronto. As well, it shows that the number of social housing units is projected to decline by 1,921 units over the next year and further decreases in subsequent years with rising costs of managing social housing units.
- Under the City's Housing Opportunities Toronto plan, the City commits to create 1,000 new affordable rental housing units per year and 200 new affordable home ownership units (the latter target was recently increased to 400 affordable home ownership units per year). The rental targets were already far too low to meet the need, and the City has not even met that low-bar goal. Also important to note, many of the units of affordable rental housing have rents based on average rental housing costs which is not truly affordable to many people struggling with poverty.
- One hopeful note: The federal government has committed to increased infrastructure funding and to introduce a national housing strategy. It has also committed to fixing the problem of declining subsidy funding for social, non-profit and co-op housing projects due to expiring operating agreements; however, for now, this problem is resulting in additional funding challenges for the City of Toronto. The 2017 federal budget will give us a better sense of the level of federal commitment. The 2017 City budget gives little hope for Toronto residents struggling with lack of affordable housing and homelessness and identifies potential service cuts that would be devastating for the most vulnerable residents of the city.
Source: City of Toronto, Shelter, Support and Housing Administration 2017 operating budget analyst notes.
Source: City of Toronto, Affordable Housing Office 2017 operating budget analyst notes.
Source: City of Toronto, Shelter, Support and Housing Administration 2017 operating budget analyst notes.
The City's homeless shelter system is full up, operating well over 90% occupancy night after night. On December 8, the shelter system had an occupancy rate of 96%, with the men's, women's and youth shelter systems all operating at more than 95% occupancy. As the homelessness crisis intensifies, people are staying longer at shelters and overcrowding conditions are contributing to communicable disease outbreaks, such as the continuing Strep A outbreak at Seaton House. In the winter months, there is a great reliance on Out of the Cold programs, warming centres and 24-hour drop-ins which are also crowded. These programs are not set up to comply with the City's shelter standards but are operating as make-shift shelters due to overcrowding in the shelter system.
In 2013, in response to strong public concerns and advocacy efforts, Toronto City Council acknowledged the problem of overcrowding in the shelter system and committed to operating all sectors (men, women, youth, co-ed, family) below 90% occupancy to ensure that the system would not be overcrowded and had the flexibility to meet the needs of people experiencing homelessness across the city. Three years later, this commitment has never been met.
In 2015, Toronto City Council passed a motion to add 181 beds to the shelter system to address issues of overcrowding. While the City of Toronto is opening new shelters, progress is slow and further hampered by some shelter closures. The City budget projects improvements in shelter occupancy in 2017, particularly for youth shelters which are projected at 100% occupancy in 2016, declining to 84% occupancy in 2017. In contrast, occupancy in the men's and women's shelter systems is expected to remain above 90% in 2017, at 92% for men's shelters and at 99% for women's shelters.
Bottom line, in the absence of safe, affordable housing, we must ensure that the shelter system is adequately funded to meet the needs of people experiencing homelessness tonight, this week and this winter. This winter is expected to be particularly harsh. Toronto City Council has adopted a winter preparedness plan to provide services and supports to people experiencing homelessness. In the absence of adequate shelter capacity, the City is adopting many temporary measures to try to meet the need. The system is stretched to its limits, and lives are certainly on the line. Program decisions need to be driven by the needs of people experiencing homelessness and not budgetary constraints. Any thought of cutting homeless services and supports in the interests of maintaining property tax increases below the rate of inflation is simply unconscionable.
Meanwhile at Toronto Community Housing, the board has decided to take $19 million from its surplus funds to help pay for its operating budget that covers the day-to-day operating costs of running TCHC. This decision by the board is in opposition to recommendations from TCHC CEO Greg Spearn to use surplus funds to pay for capital repairs to deal with the serious repair backlog that is leaving tenants with poor quality housing. Councillor Cressy who sits on the board of TCHC opposed the move to use these surplus funds for the operating budget, arguing that the funds should be used to repair tenant homes and not to reduce the burden on the City of Toronto to properly fund TCHC operations. However, he was not successful in persuading the board. The board is expected to draw funds from reserves to increase funding available for capital repairs in 2017, resulting in budget challenges in subsequent years.
This move to use surplus funds for operating expenses presumably reduces the City budget shortfall from $91 million to $72 million. TCHC's 10-year capital repair plan requires significant funding. Toronto City Council has revenue tools available to meet operating requirements. Council shouldn't balance the budget at the expense of tenants living in substandard housing.
Finally, some good news. The City is moving forward with the development of landlord licensing to ensure that landlords maintain rental apartments in a state of good repair. The Municipal Licensing and Standards budget includes $4.4 million plus associated revenues to get this work started through the development of a framework for multi-residential rental property licensing.