2021 City Budget: City Council Passes 1st COVID Budget, Some New Policy Directions, But Little New Funding

On February 18, Toronto City Council passed the 2021 City budget. City Council made few changes to the original staff-recommended (draft) budget launched back on January 14. Most significant, the budget shortfall resulting from the pandemic has been reduced to $649 million (plus an additional $15.4 million that is unfunded and required from the provincial government for supportive housing and $61 million that is unfunded and required from the federal government for supports for refugees). 

While that's a large reduction from earlier figures projecting a $1.8 billion shortfall, it remains a substantial hole in the budget. For some perspective, it would take a residential property tax increase of more than 20% to fill the gap. The City is looking to the federal and provincial government to step up with the funds this year. If senior orders of government don't come through with the funding, the City will dramatically reduce its capital budget for infrastructure, affecting many budgets, particularly public transit and transportation.

Changes to the Budget through the City's Budget Process 

After the staff-recommended (draft) budget was launched on January 14, the Budget Committee reviewed the budget, heard from members of the public about their priorities for the city, and voted on motions that proposed funding increases in several areas. Councillor Layton put forward motions at Budget Committee to increase funding for climate action, affordable housing, the Housing Commissioner, winter washrooms, and ravines. All motions failed. Following the Budget Committee's review, the budget remained substantively unchanged from the staff-recommended version launched on January 14.

Next, the Mayor's Executive Committee reviewed the budget. The Executive Committee added $8 million in funding for programs and services, paid through a special dividend from the Toronto Parking Authority. The $8 million added will support youth employment ($3 million, Social Development, Finance and Administration), TO Supports Investment Fund ($2 million; for nonprofits and community orgs to provide mental health supports with funding through Social Development, Finance and Administration), accelerate expansion of internet access for low income and underserved communities ($2 million, Technology Services), and support for local business ($1 million, Economic Development and Culture for campaign to shop local, dine out, etc. when the pandemic subsides). See motions below.

Today, February 18, Toronto City Council held final votes on the 2021 budget. Council voted to add $4 million to the Social Development, Finance and Administration budget, to be used if needed, and any remaining funds be applied to capital reserves. Councillor Crawford moved this motion to provide the division with additional funding to carry out its work. If the division would like to allocate the funds, staff will come forward to Council for a motion approving the allocation. The funds came from a special dividend from the Toronto Parking Authority. Later in the meeting, Councillor Wong-Tam moved a motion which passed to use $2.47 million of the $4 million to help out taxi drivers.

In total, the Executive Committee and Council added $12 million to the budget from this funding source. Most pre-COVID budgets added more funding to programs and services through the budget process, but not so today. Members of Council and City staff noted that while this is the first COVID budget, the impact of the pandemic on City finances will continue for several years to come. This year's budget had a low level of new investment in the City's Poverty Reduction Strategy and in new and enhanced services.

The final budget includes a shortfall of $649 million that requires federal and provincial funding. In addition, the City requires $15.6 million for supportive housing from the provincial government and $61 million for supports for refugees from the federal government. If the City does not receive the funds to cover the shortfall and these additional programs and services, Council will have to decide how to proceed. Its 'Plan B' is to reduce the capital budget which would have an enormous impact on infrastructure. There's also a great deal riding on whether the Province provides the funds for supportive housing. Twelve hundred units of supportive housing are in jeopardy. Read more here and here. We can't lose those new units of supportive housing. They are desperately needed and have a significant impact on capacity within the shelter system.

 

Deeper Dive: Toronto City Council's Final Budget Meeting (February 18) 

Motion to make available an additional $4 million for social development programs and services (Carried)

This motion adds $4 million to the $8 million added to the budget at the Executive Committee meeting, for a total of $12 million. Councillor Layton moved a motion to allocate some of the $4 million to the Climate Action Plan and new winter washroom access. His motion failed. Councillor Wong-Tam moved a motion to use some of the $4 million to help out taxi drivers. Her motion passed. See below.

Councillor Crawford motion 4 mil

Motion to assist taxi drivers with regulatory costs, renewal fees, and license issues (Carried)

Councillor Wong-Tam's motion uses $2.47 million of the $4 million from Councillor Crawford's motion above to assist taxi drivers.  

KWT taxi 1

KWT taxi 2

 

Select policy and other motions (i.e. motions that don't add funding to the 2021 City budget) (Carried)

Councillor Carroll's motion (carried) speaks to the need for City Council to address its longstanding revenue problem, the funding problems resulting from the pandemic, and the need to ensure long-term financial sustainability. Throughout the budget process, Councillor Carroll has voiced concerns about the City's future financial situation, once senior orders of government are no longer providing pandemic relief or stimulus funding and cities are left to deal with the financial fallout. Her motion carried. 

Councillor Carroll motion 1

cllr carroll motion 2

Some motions calling for reports and information on the policing budget, community crisis response, and community safety carried.

Councillor Layton police motion

This motion was moved by Councillor Matlow and amended by Councillor Carroll.

Cllr Matlow motion amended

KWT police motion

KWT community safety

Councillor Ainslie's motion calls for information to consider reinvesting library savings in new and enhanced library services in future.  

Cllr Ainslie library motion

Councillor Carroll's motion requests funds from the federal and provincial government to pay for digital literacy for seniors and community librarians outreach programs, as part of the City's request for pandemic funding.

Cllr Carroll library motion 1

cllr carroll library 2

 

Select policy and other motions (Lost)

Councillor Perks' motion (lost) demonstrates the disconnect between Council's decisions about property tax rates and various social objectives such as achieving universal access to licensed, affordable quality child care, ending homelessness, and ensuring the City can meet transit capital needs. The rates are set first, and then Council considers programs and services once the property tax rates are locked in. We have advocated to start with City goals, then consider funding options to meet these objectives. For many years, low property taxes have been the first priority.

Cllr Perks motion

Councillor Wong-Tam moved a motion to get the Housing Commissioner role and function up and running faster. Her motion lost.

KWT housing commissioner lost

Councillor Holyday moved a motion to cancel start-up funding for the City's Vacant Home Tax program. His motion lost.

Cllr Holyday vacant home tax lost

 

Deeper Dive: Executive Committee's Budget Review (February 11)

Motion to increase funding for select programs and services by $8 million (Carried)

  • Motion 6a - Moved by Mayor John Tory (Carried)
    "That City Council increase the 2021 Staff Recommended Operating Budget for Non Program by $8 million gross and $0 net to reflect a one-time increase to Non-Program Revenues of $8 million through a special dividend from the Toronto Parking Authority, with corresponding one-time expenditure increases as follows:

    Social Development, Finance and Administration - Operating Budget

    1. An increase of $5 million gross and net to the 2021 Operating Budget for Social Development, Finance and Administration for the following enhancements:

    a. $3 million gross and net, including one additional temporary staff position and authorize the Executive Director, Social Development, Finance and Administration to enter into agreement to disburse funding to relevant City Agencies, Boards and Commissions and contracted community service agencies to enhance existing youth jobs, workforce development pathways, and training initiatives, in order to support youth in the City's underserved neighbourhoods hardest-hit by the COVID-19 pandemic; and

    b. $2 million gross and net, and authorize the Executive Director, Social Development, Finance and Administration to allocate and disburse this funding to expand and extend the TO Supports Investment Fund to assist community groups and non-profit organizations addressing mental health issues, with an emphasis on supporting individuals in the neighbourhoods hardest-hit by the COVID-19 pandemic.

    Technology Services - Operating Budget

    2. An increase of $2 million gross and net to the 2021 Operating Budget for the Technology Services Division to expand and accelerate internet access for low-income and underserved communities and residents.

    Economic Development and Culture - Operating Budget

    3. An increase of $1 million gross and net to the 2021 Operating Budget for Economic Development and Culture for confidence-building and marketing initiatives to encourage individuals, when the pandemic subsides and in keeping with all Toronto Public Health recommendations, to shop locally, dine out, ride public transit and otherwise support local businesses.”

 

Deeper Dive: Budget Committee's Final Wrap Up Session (February 4)

Motions to increase funding for climate action and housing (Lost)

  • Motion 4b. Part 2. "City Council increase the 2021 Staff Recommended Operating Budget for Environment and Energy by $2.3 million funded from the Tax Stabilization Reserve, to enable the Division to deliver the climate emergency commitments in Recommendation 1.b. above." (i.e. a low-carbon jobs strategy; a strategy for securing dedicated and sustained climate funding; a plan for meaningfully consulting and cooperating with Indigenous communities; a plan for applying the City's Equity Lens to TransformTO; a climate lens that evaluates the climate impacts of major City decisions as part of the 2022 City Budget) (Lost; motion moved by Councillor Layton; in favour: Carroll, Layton; opposed: Bradford, Crawford, McKelvie, Nunziata)
  • Motion 4d. Part 1. "City Council increase the 2021 Staff Recommended Operating Budget for the Housing Secretariat by 0.500 million funded from the Corporate Consulting Reserve Fund to establish the role or function of Housing Commissioner in 2021, in consultation with human rights experts." (Staff say they will advance this work by employing consultants funded through existing budgets.)(Lost; motion moved by Councillor Layton; in favour: Carroll, Layton; opposed: Bradford, Crawford, McKelvie, Nunziata)
  • Motion 4f. Part 2. "City Council increase the 2021 Staff Recommended Operating Budget for Shelter, Support and Housing Administration by $15.4 million to ensure that resources are not a barrier to securing emergency housing and to ensure the City can meet the goals set out in the emergency housing plan approved by Council in December to activate 1,098 affordable supportive homes in 2021; and City Council continue to re-iterate its request that the Province of Ontario and Government of Canada provide $48 million in annual ongoing operating funding to create and maintain 2,000 new supportive housing opportunities for vulnerable and marginalized individuals experiencing homelessness, a pro rata amount of $15.4 million ($26.35 million annually) for the 1,098 units opening throughout 2021 and an additional $21.65 million for the remaining 902 supportive housing opportunities for a total of $48 million annually for all 2,000 supportive housing opportunities." (Lost; motion moved by Councillor Layton; in favour: Carroll, Layton; opposed: Bradford, Crawford, McKelvie, Nunziata) 
  • Motion 4h. "City Council adjust the current Municipal Land Transfer Tax rate on sales with Value of Consideration over $2,000,000 by an increment of 1.0 percent, so the new rate would be 3.5 percent on sales with Value of Consideration over $2,000,000. City Council direct that the funds raised from sales with Value of Consideration over $2,000,000 be allocated into the City Building Fund to be used specifically for affordable housing." (Lost; motion moved by Councillor Layton; in favour: Carroll, Layton; opposed: Bradford, Crawford, McKelvie, Nunziata) 

Select motions that passed

  • Motion 1k. "City Council request the General Manager, Transportation Services to report back to the July 5, 2021 meeting of the Infrastructure and Environment Committee on the next phase of the three-year Cycling Implementation Plan and all resources necessary to achieve these targets, in the 2022 Budget and beyond." (Carried; motion moved by Councillor Crawford)
  • Motion 2. "That the Budget Committee: Endorse the City Council-amended EX20.1 Community Crisis Support Service Pilot and recommend that Council support any in-year budgetary adjustments necessary to facilitate timely implementation of the recommendations." (Carried; motion moved by Councillor Carroll)
  • Motion 4a. Part 2. "City Council request the General Manager, Children's Services to report to the Economic and Community Development Committee in the second quarter of 2021, on Phase 1 of the 10-year Child Care Growth Strategy and provide recommendations for Phase 2 which considers the impacts of COVID-19, advances affordability, accessibility, equity and quality in the early years and child care sector for all Toronto families, and that provides a framework for future Federal Provincial Municipal discussions." (Carried; motion moved by Councillor Layton)
  • Motion 4b. Part 1b. Amended by Motion 6c. "City Council direct the Executive Director, Environment and Energy Division to a. report back to the Infrastructure and Environment Committee in the third or fourth quarter of 2021 on the following delayed climate emergency commitments currently deemed "ongoing": i. a low-carbon jobs strategy; ii. a strategy for securing dedicated and sustained climate funding; iii. plan for meaningfully consulting and cooperating with Indigenous communities; iv. a plan for applying the City’s Equity Lens to TransformTO; v. a plan to increase youth participation in TransformTO; and vi. report back to the Infrastructure and Environment Committee in the third quarter of 2021 on a climate lens that evaluates the climate impacts of major City decisions as part of the 2022 City Budget. (Carried; motion moved by Councillor Layton and amended by Councillor McKelvie)
  • Motion 4d. Part 2. Amended by Motion 6d. "City Council direct the City Manager to report back to City Council by the third quarter of 2021 with an update on the establishment of a Housing Commissioner." (Carried; motion moved by Councillor Layton and amended by Councillor McKelvie)

  • Motion 6b. "The Director, Energy and Environment report back in the third quarter of 2021, as a preview to the net-zero report, on potential acceleration projects and funds required in the 2022 budget process for: a. internal resources to implement the net zero plan; and b. options to accelerate the rollout of the net zero plan, including but not limited to: a. The Green Will initiative; b. electric vehicle strategy; c. low carbon thermal energy systems; and d. retrofits of City of Toronto and Toronto Community Housing Corporation buildings." (Carried; motion moved by Councillor McKelvie)

Select motions that failed

  • Motion 4f. Part 1. "City Council reiterate its commitment to taking all measures needed to provide emergency housing, shelter or respite in order to ensure there are enough spaces to house everyone who is sleeping outdoors or in encampments this winter, and City Council authorize City staff and provide the resources needed to fulfill this direction, including the authority to site emergency shelter/hotel programs rapidly in all neighbourhoods across the city where opportunities are available and to take every step necessary to meet these timeframes, including expediting community notice and engagement, where necessary, before a program opens." (Lost; motion moved by Councillor Layton; in favour: Carroll, Layton; opposed: Bradford, Crawford, McKelvie, Nunziata)
  • Motion 4g. "1. City Council direct the City Manager to develop a multi-year plan, timeline, and process, to begin transferring responsibility and resources from the Toronto Police Service's Operating Budget to other relevant City divisions and agencies, including initiating the necessary processes to plan and implement changes to: a. crisis response and intervention for non-violent calls related to mental health response, homelessness, gendered violence, and youth crime; b. 911 call centre operations and who responds to non-emergency calls; c. traffic management; and d. parking enforcement 2. City Council direct the City Manager to report to City Council by the end of the fourth quarter of 2021 on time and resources required to scale up capacity of City Divisions, other agencies, or institutions, to take on the responsibilities identified in Recommendation 1 above, along with a detailed plan and financing strategy to transition to these new models. 3. City Council direct the City Manager to allocate any additional savings realized after services have been transferred to those which provide community support through increased programming and services as identified in consultation with the City’s Confronting Anti-Black Racism unit." (Lost; motion moved by Councillor Layton)
  • Motion 4i. "City Council request the General Manager, Transportation Services to report back to the Budget Committee in the third quarter of 2021 on the budget implications of building, starting in the 2022 budget, 25 kilometres, 50 kilometres, and 100 kilometres of new protected and upgraded bike lanes and cycle tracks annually." (Lost; motion moved by Councillor Layton)

Motion to cancel the proposed recreation user fee increase (Ruled redundant; no vote)

Recreation user fees are set to increase by an average of 2.06% in 2021. Councillor Layton attempted to cancel the recreation user fee hike by making a tiny increase (0.0114%) to the residential property tax rate - an increase that would have cost the average homeowner about 36 cents. No dice. A majority of the committee voted to maintain the residential property tax increase at 0.7%.  As a result, the following motion was considered redundant and not voted on. 

  • Motion 4e. Part 8. "City Council increase the 2021 Staff Recommended Operating Budget for Parks Forestry and Recreation by $0.380 million gross and net to cancel recreational user fee increases, to be offset by a 0.0114 percent increase to the residential property tax rate." (Redundant, motion not voted on; motion moved by Councillor Layton)

 

Deeper Dive: Select Social Development Programs

  • The staff-recommended budget includes a 1% inflationary increase to community grants (i.e. Community Partnership and Investment Programs; CPIP). There are no cuts to the City's contribution to CPIP. However, in 2020, an additional $10 million, above the usual CPIP funding level, was provided to nonprofit organizations to respond to critical community issues resulting from the pandemic. This $10 million was one-time emergency funding from the provincial government ($7.848 million) and a donation from the Canadian Medical Association Foundation and Toronto Foundation ($2.161 million). The Executive Committee added $2 million to the budget for TO Supports to fund community agencies to provide mental health supports. There's no indication if the provincial government will provide additional funding for community services in response to the ongoing pandemic in 2021.
  • The Social Development, Finance & Administration (SDFA) budget includes over $7 million for new and enhanced programs ($7.1548 million gross; $6.9156 million net) (with additional funds added at Executive Committee and City Council, details described above):

sdfa new and enhanced 1

sdfa new and enhanced 2

  • Good news, the budget includes funding to complete Phase 2 of the Fair Pass Transit Discount Program. Bad news, the implementation plan is behind. The original plan called for a 3-year phase in, concluding in 2020. The 2021 budget expands the program eligibility to an additional 25,000 individuals receiving housing supports, completing Phase 2. In Phase 3, the City plans to extend eligibility to all adults who meet its low income criteria (below the Low Income Measure +15%) and who were not included in Phase 1 or 2. A City staff report from 2016 shows Phase 3 is expected to have the biggest price tag (2016 report estimates were $18 million in additional costs for partial year rollout). Consider that this year's budget includes considerably less than that for all new and enhanced programs and services for the City's Poverty Reduction Strategy ($8.092 million gross; $4.51 million net). Are we going to see the plan fully implemented in 2022? A City staff report is expected in June detailing plans for Phase 3, including requirements for rollout and expected costs. 
  • Black Lives Matter has called for a 50% reduction in the police budget. Toronto Neighbourhood Centres and partners released a report identifying $340 million that could be reallocated from the police budget into proven, effective, community-based programs that support community safety. You won't find that in the police budget. The SDFA budget does include $1.7 million to support the development of the Community-Based Mobile Crisis Response Pilot Project, a community-based alternative to police response to crisis calls. The pilot will be implemented in 2022. Police get over 30,000 calls a year related to persons in crisis. 
  • Read the TOwards Peace briefing note to learn more about this violence intervention model to be launched in the northwest part of the city, with plans to expand in other areas in future years. 
  • Check out the Toronto Community Benefits Network, and learn more about how the network is organizing to strengthen the City's Community Benefits Framework. Find out more about the City's framework here.
  • Learn more about the City's Action Plan to Confront Anti-Black Racism, its Poverty Reduction Strategy, and AnchorTO program. The staff-recommended budget included $8.092 million (gross; $4.51 million net) for new and enhanced programs under the Poverty Reduction Strategy (PRS). Executive Committee added $2 million for work to expand and accelerate internet access for low income residents and underserved communities. City Council also set aside $1.53 million (of the $4 million motion) for the Social Development, Finance Administration division to support its work which could touch on the PRS. All in, it's a low level of new investment. 
  • SDFA is working on the Youth Service Review with a City staff report expected in Q1 or Q2. The purpose of the review is to "provide a long-term strategic approach to the planning, coordination and monitoring of City of Toronto youth services to improve outcomes for young people in Toronto, particularly those most vulnerable to serious crime and violence." The review follows from and is informed by the City's Toronto Youth Equity Strategy, which was developed in response to The Review of the Roots of Youth Violence

 

Always Time to Take Action  

Although the budget process is over, the time for action is not! Sign on to:

 

That's a wrap for the 2021 City of Toronto budget.

Photo credit: Image by Christian Mendoza on Unsplash

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